The only way to address the primary driver of high shelter costs is to build more apartments and houses. High interest rates prevent that. It may seem counterintuitive to suggest that today’s high interest rates will fuel shelter inflation down the road. After all, the Federal Reserve has tightened monetary policy to stamp out price pressures ...

A rise in the number of existing houses for sale should soften prices, making the environment more competitive for new construction. Homebuilders were one of the big surprise winners in the US economy last year as record-low inventory of existing houses for sale and gently rising prices allowed companies such as KB Home and Lennar Corp. to ...

Lending and bond-market activity are climbing as bankers and investors focus on the salubrious effects of rate cuts to come. The timing and pace of Federal Reserve interest rate cuts will consume economists and market commentators for months to come. But an emerging story in 2024 is that lenders and borrowers are jumping the gun well in advance ...

Sellers are finally giving up the wait, driving up inventory levels and handing negotiating power back to would-be buyers in many markets. If you need to sell your home in the next few months, I’d get on with it. As we enter the spring selling season, it’s becoming increasingly clear that the period during which sellers had the leverage in ...

Businesses and consumers can withstand overly restrictive borrowing costs for only so long. Stocks and bonds rallied at the end of last year on the hope of a seemingly improbable combination of dynamics playing out to support financial assets in 2024 — cooling inflation, solid economic growth, a resilient labor market, and as much as 150 ...

The sticker shock of the pandemic is in the rearview mirror and consumers are back to their buying ways again. Economic growth in the US is off to a better start than expected this year, thanks largely to a long-awaited pickup in consumers buying “stuff” again after they shifted spending to experiences in 2022. Shoppers have been spurred by ...

Moderating inflation and still tepid demand are a difficult combination for corporate America. Corporate America has greeted 2024 with a run of job-cut announcements. The reductions, though modest, seem puzzling at a time when the stock market is flirting with all-time highs and real gross domestic product growth continues to be healthy. Think ...

Moderating inflation and borrowing costs are just what households need to lift their mood. The unhappiness of American consumers despite rapid job and economic growth in the past few years is a hotly debated topic. Is it inflation? High borrowing costs for homes and automobiles? Crowded airports and packed airplanes? For better or ...

The payrolls data still looks fine, but under the hood are signs of deterioration for the growing number of people who are unemployed or keen to switch jobs. It’s easy to look at the rise in the unemployment rate over the past six months and attribute it to a growing labor force, as Goldman Sachs Group Inc. argued over the weekend, or a ...

New construction was the sector’s only bright spot. Mortgage rates near 8% have wrecked homebuilder sentiment and buyer appetite. For the first time since the Federal Reserve started raising interest rates, every part of the housing market is now poised to worsen. The resale market has been slumping since early 2022 as potential sellers sit ...

Frustrated US homebuyers may finally catch a break as rising inventories and motivated sellers may hold down prices next year. Home prices are once again on the rise following a brief decline. But before would-be homebuyers start to worry about prices zooming higher from here, note the emerging evidence of a shift in the balance of power in ...

Companies need to decide how they will deal with increasing pressure on profit margins — setting the direction for the economy. Consumers might still be benefiting from inflation pressures abating, but the same is no longer true for corporations.Categories that provided relief to companies’ bottom lines over the past year — freight and ...

Households are still reaping the benefits of a surge in home equity and aren’t in the mood to save. That’s good news for the economy. Arguably, the biggest question about the US economy right now is whether consumers can maintain their pace of spending. Student loan payments resume in October. Pandemic-era excess savings are expected to run out ...

Just as there were reasons a year ago to think growth would pick up in 2023, there are now reasons to think it will slow over the next six months. Halfway through the third quarter, the economy is looking surprisingly strong. A tracker from the Atlanta branch of the Federal Reserve has real gross domestic product growth, based on the limited ...

There are growing signs that the supply of new and resale homes on the market will pick up in 2024, taking some of the steam out of prices. The story of US housing for hopeful buyers in 2023 has been one of frustration. A lack of supply has stabilized a market where affordability remains challenging.Homeowners with low mortgage rates have ...

Signs of an economic rebound are mounting, pointing to a return of policy angst for the Fed next year. Signs of abating inflation have lifted the spirits of investors, the White House and the general public this month. While a welcome relief, inflation tends to be a lagging rather than a leading economic indicator. More forward-looking measures ...

The housing market is so tight, any relief on borrowing costs will just drive up prices, providing little help to buyers. Homebuyers can't catch a break. Sharply higher mortgage rates made houses more expensive and weakened demand without doing much to lower prices in most of the US. The supply of existing homes shrunk as owners hung on to ...

Jittery homebuilders aren’t ramping up construction fast enough to ease what’s already a severe housing shortage. Homebuilders continue to finish homes faster than they're starting new ones. Improved supply chains are allowing them to work through backlogs built up during the pandemic when they couldn't keep up with demand. But as mortgage ...

Younger people entering the workforce are shoring up growth and helping offset the slide in office jobs. Knowledge workers in technology, finance and elsewhere in corporate America are used to having the most options and leverage in the labor market. They are still far from facing hard times, but recent data suggest their fortunes ...

Past declines have been about unwinding excesses in investment, hiring or construction. This one is about unwinding excessive belief in low interest rates. We've been watching slumps ripple through various parts of the economy over the past 18 months: technology startups and stocks, regional banks and growing concern about commercial real ...

After a year of dragging down GDP, homebuilders are showing strength just when the economy may need it most. Ready for a little good news? As investors take stock of the fallout from the Silicon Valley Bank failure and wonder about broader fallout for the economy in the coming months, the housing market has delivered some reason for optimism. ...

Biden is tying startup funding to his national and social policy priorities. That’s probably an improvement over Silicon Valley values. Higher interest rates, slumping stock prices and corporate America's shift in focus from growth to profitability has taken the air out of one of the main drivers of innovation and new company formation in ...

With current owners staying put thanks to cheap mortgages, existing homes for sale are hard to find. That puts homebuilders in the catbird seat. After the housing market's surprise rebound in January, 30-year mortgage rates have risen to nearly 7%, cooling things back off. Mortgage applications have slumped to a 28-year low. But that's not ...

CEOs need to stop trash-talking the economy unless they want to make it a self-fulfilling prophecy. The official economic forecast is still chilly for 2023, but a host of indicators suggest things were heating up, not cooling, in the first month of the year. Auto sales had their best month since the first half of 2021. The housing market ...

Price cuts on new houses will be more plentiful in a few months as construction backlogs begin to ease and costs continue to come down. After 30-year mortgage rates surged past 7% in October, a decline to near 6% in recent weeks has made the start of 2023 look less awful than some had feared. So what does this mean if you're looking to buy ...

A strong labor market and lower prices for housing and consumer goods will help keep the economy growing this year, but brace for a rebound back into "too hot" territory. One of the main questions for the US economy in 2023 is how the trajectory of inflation will unfold. While the Federal Reserve's forecast for core inflation this year ...

While investors were focused on fears of a collapse in the homebuying industry, a crash in the apartment market has been taking shape. For most of the past year, investment risk in the housing market has been focused on the for-sale segment. That was largely because the huge run-up in home prices during the pandemic led to a mentality of ...

Easing inflation and mended supply chains are translating into more buying power for Americans despite a softer labor market. The red-hot labor market is cooling. Monthly US job growth has slowed to around 270,000 from more than 500,000 at the start of the year. Employers are staffing up, returning average work weeks to pre-pandemic ...