Market Matters

Housing Waits–and Waits–on Millennials Source: Wall St. Journal Prior to a major plunge in housing starts in February, single-family housing starts were running less than half the levels seen during the housing boom and are 37 percent below their average of the 1990s. A major factor being blamed is the absence of younger home buyers. Research has found that the share of households headed up by someone 25 to 34 years old has fallen far more than other age groups since 2006. Overall, housing markets will depend on the labor markets, especially the hiring and paychecks of millennials. Read the full story   Southern California housing market is poised for a stronger spring Source: L.A. Times   Market watchers and real estate agents say they're starting to see more sellers as prices remain relatively high, interest rates stay low and fewer borrowers owe more on their houses than they're worth. Selma Hepp, senior economist at the CALIFORNIA ASSOCIATION OF REALTORS®, says measures of buyer interest — online real estate searches and open-house traffic — have jumped in recent weeks. If that activity translates into sales, it could put a new round of pressure on pricing, she said. “The fundamentals are good," Hepp said. "But affordability is going to stare us right in the face again." Read the full story The U.S. Cities Where It Takes the Longest to Be Able to Afford to Buy a Home Source: The Atlantic   Americans are set to spend nearly $10 trillion on housing over the next five years but the question remains: Where are we spending the most, especially when compared to our incomes, to purchase homes? According to a new metric evaluating housing costs, the metros where households have to devote the most years of income to housing are mostly on the West and East Coasts, in California, Washington State, Oregon and Arizona, and across the Boston-Washington corridor. Nine of the ten most expensive areas are in California. In these locations, the price of a home is equivalent to about seven years of income. In the top three metros, the price of a home equals roughly nine years of income. Read the full story      Housing starts see biggest collapse since January 2007 Source: HousingWire   Harsh winter weather has a big impact on housing starts, as a devastating 17 percent drop hit the industry in February. Overall, privately owned housing starts in February plummeted to an annualized 897,000 from the revised January estimate of 1,081,000, with drops in the Northeast, Midwest and West leading the collapse. Single-family housing starts in February were at a rate of 593,000; this is 14.9 percent below the revised January figure of 697,000. Notably, weather was not to blame in the west but starts still dropped 18.2 percent. Read the full story Worst Case Housing Needs: 2015 Report to Congress Source: Housing and Urban DevelopmentIn a report to Congress, the U.S. Department of Housing and Urban Development (HUD) finds that worst case housing needs decreased during the 2011-to-2013 period but persist at high levels across demographic groups, household types, and regions. Substantial unmet needs for affordable rental housing remain even as economic conditions are improving. The unmet need for decent, safe, and affordable rental housing continues to outpace the ability of federal, state, and local governments to supply housing assistance. Worst case needs are defined as renters with very low incomes—below 50 percent of the Area Median Income (AMI)—who do not receive government housing assistance and who pay more than one-half of their income for rent. Read the full story.

California’s Housing Costs Hurt Economy, Increase Poverty, Report Finds Source: Wall St. Journal  A new state report finds that California’s high housing costs decrease economic productivity, increase poverty rates, lower homeownership, increase crowding, and lengthen commute times. The report states, “The state’s high housing costs make California a less attractive place to call home, making it more difficult for companies to hire and retain qualified employees, likely preventing the state’s economy from meeting its full potential.” It urges the legislature to pass laws that would promote more density in urban areas. It also advises the legislature to consider changes to the state’s environmental review process for new development. Read the full story