Question #8 for 2019: How much will Residential Investment increase?

Earlier I posted some questions for next year: Ten Economic Questions for 2019 . I'm adding some thoughts, and maybe some predictions for each question. 8) Residential Investment: Residential investment (RI) was sluggish in 2018, and new home sales were mostly unchanged from 2017.  Note: RI is mostly investment in new single family structures, multifamily structures, home improvement and commissions on existing home sales.  How much will RI increase in 2019?  How about housing starts and new home sales in 2019? First a graph of RI as a percent of Gross Domestic......(read more)

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One Year On, These Housing Markets Are the Winners and Losers of U.S. Tax Reform

The Tax Cuts and Jobs Act of 2017, effective on Jan. 1, 2018, has drawn clear winners and losers among America's luxury housing markets. The post One Year On, These Housing Markets Are the Winners and Losers of U.S. Tax Reform appeared first on Real Estate News & Insights | realtor.com® ....(read more)

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Why this year suddenly fell apart on Wall Street, and what's ahead

As the days and weeks progressed, Wall Street suddenly had a new reality to face: A market that seemed bulletproof was now susceptible to a whole range of worries....(read more)

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Factbox: Departments hit by partial U.S. government shutdown

Shuttered U.S. government agencies remained closed on Monday, as Democrats in the House of Representatives readied legislation intended to reopen the government that would not meet President Donald Trump's demand for $5 billion to fund a border wall....(read more)

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House Democrats ready bills to reopen government with $1.3 billion for border security

House of Representatives Democrats will introduce legislation this week intended to end a partial U.S. government shutdown and fund the Department of Homeland Security through Feb. 8, including $1.3 billion for border security but not the $5 billion President Donald Trump has demanded for a border wall, a senior Democratic aide said on Monday....(read more)

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Dallas Fed: "Texas Manufacturing Expands Modestly, Outlook Worsens"

From the Dallas Fed: Texas Manufacturing Expands Modestly, Outlook Worsens Texas factory activity continued to expand rather modestly in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, inched down one point to 7.3. Other indexes of manufacturing activity also suggested modest growth in December, although demand growth picked up a bit. The capacity utilization index fell from 9.4 to 7.6, and the shipments index dipped to 6.1. Meanwhile, the new orders index moved up five......(read more)

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People Have More Home Equity Than Ever Going Into 2019

New year will see a surge in home equity borrowing thanks to highest equity levels ever. The post People Have More Home Equity Than Ever Going Into 2019 appeared first on The Basis Point ....(read more)

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May Have to Wait Until After New Year for Resolutions

Treasuries May Have to Wait Until After New Year for Resolutions    Bloomberg Perhaps the best that can be said of a painful year across financial markets is that there's room for improvement in 2019. It's less clear exactly what might pull ......(read more)

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Did you know a $2.7 billion data company called Plaid secretly powers your mortgage?

Plaid powers most of your financial life behind the scenes. Here's what they do and whether your data is safe. The post Did you know a $2.7 billion data company called Plaid secretly powers your mortgage? appeared first on The Basis Point ....(read more)

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Eye on Housing: Home Features Buyers Consider Essential

Top Posts: Home Features Buyers Consider Essential ...(read more)

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Q4 GDP Forecasts: Mid 2s

From Goldman Sachs: We also lowered our Q4 GDP tracking estimate by one tenth to +2.6% (qoq ar) . [Dec 28 estimate) From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Dec 28 estimate] emphasis added And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 2.7 percent on December 21 , down from 2.9 percent on December 18 [Dec 21 estimate] CR Note: These estimates suggest GDP in the mid-2s for Q4....(read more)

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US student debt levels set a new record in 2018—here's how much the typical borrower owes

This year, U.S. student debt levels set a new record. According to the St. Louis Federal Reserve, borrowers collectively owe over $1.5 trillion in student loans....(read more)

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El-Erian: Criticize the Fed more for how it communicates, and not on monetary policy

El-Erian argues that the central bank under Chairman Jerome Powell made an error in changing the number of potential interest rate hikes next year....(read more)

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The 10-Year Yield Will Go Higher, Says Bulltick's Vera

The 10-Year Yield Will Go Higher, Says Bulltick's Vera    Bloomberg Bulltick's head of research and strategy Kathryn Rooney Vera discusses her view on the Fed with Bloomberg's Alix Steel on 'Bloomberg Daybreak Americas....(read more)

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Question #9 for 2019: What will happen with house prices in 2019?

Earlier I posted some questions for next year: Ten Economic Questions for 2019 . I'm adding some thoughts, and maybe some predictions for each question. 9) House Prices:  It appears house prices - as measured by the national repeat sales index ( Case-Shiller , CoreLogic ) - will be up around 5% in 2018.  What will happen with house prices in 2019? The following graph shows the year-over-year change through October 2018, in the seasonally adjusted Case-Shiller Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). Click on......(read more)

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Chicago PMI Decreased Slighly in December

From the Chicago PMI: Chicago Business Barometer Moderates to 65.4 in December The MNI Chicago Business Barometer eased to 65.4 in December, down 1.0 point from November's 66.4. ... After two consecutive months of higher readings, the Employment indicator receded in December, hitting a three-month low, although did remain above the neutral-50 mark. … "The MNI Chicago Business Barometer saw 2018 out in good health, assisted by a firm uptick in Production, cementing the best calendar quarter outturn in a year," said Jai Lakhani, Economist at MNI Indicators. "Encouragingly, inflationary......(read more)

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UBS Sees No Risk of Europe Recession, U.S. `Even Less So'

UBS Sees No Risk of Europe Recession, U.S. `Even Less So'    Bloomberg Geoff Yu, head of the U.K. investment office at UBS Wealth Management, discusses market volatility and the outlook for the European and U.S. economies in ......(read more)

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Don't laugh: The Fed will be cutting rates 'in coming months,' David Rosenberg says

History has shown that the Federal Reserve can and will change its mind on a dime when it comes to raising and cutting interest rates, according to an analysis by David Rosenberg, the chief economist and strategist at Gluskin Sheff....(read more)

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Mortgage Rates Continue to Fall in Holiday Gift for Home Buyers, Sellers

Home buyers and sellers are in for even more holiday cheer this season as mortgage interest rates continued to fall. The post Mortgage Rates Continue to Fall in Holiday Gift for Home Buyers, Sellers appeared first on Real Estate News & Insights | realtor.com® ....(read more)

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The 'January Effect' could be the market's big hope for a bounce

One overlooked explanation for the blutal stock rout this month is tax selling....(read more)

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Drop in U.S. consumer confidence stokes fears of economic slowdown

A measure of U.S. consumer confidence posted its sharpest decline in more than three years in December, rattling investors already nervous about the prospect that a global economic slowdown was spilling over into the United States....(read more)

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Cramer says the Fed is 'recklessly' confusing the market — 'it's a good time to be quiet'

The Federal Reserve caused the stock sell-off by "recklessly" confusing the market on interest rates, Jim Cramer argues....(read more)

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Top Posts: Highest Paid Occupations in Construction

With the end of 2018 approaching, NAHB's Eye on Housing is reviewing the posts that attracted the most readers over the last year. In June, Natalia Siniavskaia analyzed construction wage data. According to the most recent release of the Occupational Employment Statistics (OES) by the Bureau of Labor Statistics (BLS), half of payroll workers in construction earn more than $45,820. In comparison, the US median wage is... Read More ›...(read more)

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Weekly Initial Unemployment Claims decreased to 216,000

The DOL reported : In the week ending December 22, the advance figure for seasonally adjusted initial claims was 216,000 , a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 214,000 to 217,000. The 4-week moving average was 218,000, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 750 from 222,000 to 222,750. emphasis added The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971. Click on graph for larger image.......(read more)

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ECB Sees Economic Expansion With Increased Downside Risks

ECB Sees Economic Expansion With Increased Downside Risks    Bloomberg Abbas Amel-Renani, Amundi Asset Management portfolio manager, and Carsten Brzeski, ING-DIB chief economist, discuss ECB economic policy. The central ......(read more)

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US Treasury yields lower after Wall Street's massive rally

The spread between the two-year and 10- year bond yield was also at its widest in three weeks on expectations that the Fed will pause rate hikes for 2019 on economic growth and U.S.- China trade war concerns. Consumer shares rallied and crude gained nearly 10 percent, while White House economic advisor Kevin Hassett reassured investors that Federal Reserve......(read more)

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Trump Expresses Confidence in Fed, Mnuchin

Trump Expresses Confidence in Fed, Mnuchin    Bloomberg President Donald Trump expressed confidence in the Federal Reserve and Treasury Secretary Steven Mnuchin. Bloomberg's Margaret Talev reports on ......(read more)

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Former Wells Fargo CEO argues markets would be down more if Fed didn't hike this month

The absence of a December hike would have signaled to the market that monetary policy is being determined by President Donald Trump, who has been critical of the central bank's policies, former Wells Fargo CEO Richard Kovacevich says....(read more)

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Bond Market Naysayers Are at Odds With Powell's Inflation Positivity

Bond Market Naysayers Are at Odds With Powell's Inflation Positivity    Bloomberg The Federal Reserve is confident that U.S. inflation will come in around its target next year. Heading into 2019 though, bond traders are unconvinced....(read more)

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Fed chair's job is not in jeopardy, White House economic adviser says

The head of the U.S. Federal Reserve faces no risk of losing his job and President Donald Trump is happy with his Treasury secretary, a White House official said in an apparent attempt to calm Wall Street nerves frayed by Trump's criticism of the Fed....(read more)

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The 20 Cities and Homes Favorited Most in 2018

From majestic mansions to charming cottages, these are the homes that earned the most hearts in 2018. The post The 20 Cities and Homes Favorited Most in 2018 appeared first on Redfin Real-Time ....(read more)

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Case-Shiller: National House Price Index increased 5.5% year-over-year in Octoer

S&P/Case-Shiller released the monthly Home Price Indices for October ("October" is a 3 month average of August, September and October prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs. From S&P: Phoenix Replaces Seattle in Top Three Cities in Annual Gains According to the S&P CoreLogic Case-Shiller Index The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index,......(read more)

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Top Posts: Time Needed to Build a Single-Family Home in 2017

With the end of 2018 approaching, NAHB's Eye on Housing is reviewing the posts that attracted the most readers over the last year. In July, Na Zhao analyzed data concerning popular floor plans. The 2017 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single-family house is around 7.5 months, which usually includes almost a month from authorization... Read More ›...(read more)

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10-year US Treasury yield hits lowest level since April 2018

U.S. government debt prices edged higher on Wednesday as jittery investors continued to flock to the safety of bonds....(read more)

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U.S. Treasury was not concerned on liquidity ahead of call with bankers: CNBC

U.S. Treasury officials were not concerned with liquidity in the banking system when Treasury Secretary Steven Mnuchin reached out to top U.S. bank CEOs in phone calls on Sunday, CNBC reported on Monday, citing a senior Treasury official....(read more)

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There's no place like home, and retirees say they'll renovate in order to stay

Home improvements and apps mean seniors can stay on in their homes as they grow older....(read more)

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UBS' Art Cashin doesn't expect the Fed to raise interest rates at all next year

The UBS director of floor operations at the New York Stock Exchange says he was surprised the central bank raised rates for the fourth time this year but added that Fed Chairman Jerome Powell was compelled to follow through....(read more)

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Look to the two remaining Fed Board nominees for clues about Trump-Powell battle

What President Donald Trump does with the remaining nominees for two open seats on the Federal Reserve's board will tell whether he wants to escalate his fight with the Fed....(read more)

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Top Posts: Entry-Level Home Inventory Yields Declining New Home Size

With the end of 2018 approaching, NAHB's Eye on Housing is reviewing the posts that attracted the most readers over the last year. In November, we analyzed trends for new home size. Continuing a multiyear trend, new single-family home size decreased during the third quarter of 2018. New home size has been falling over the last three years due to an incremental move to additional... Read More ›...(read more)

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Chicago Fed "Index Points to an Increase in Economic Growth in November"

From the Chicago Fed: Index Points to an Increase in Economic Growth in November Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.22 in November from a neutral reading in October . Two of the four broad categories of indicators that make up the index increased from October, and three of the four categories made positive contributions to the index in November. The index's three-month moving average, CFNAI-MA3, moved down to +0.12 in November from +0.23 in October. emphasis added This graph shows the Chicago Fed National......(read more)

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Trump's criticisms of the Fed may actually cause the central bank to 'reassert itself': Studzinski

Pimco's John Studzinski argues that Fed Chairman Jerome Powell won't bow down to pressure from the president to halt interest rate rises....(read more)

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Fed Firing Risks, Mnuchin Calls Banks, China-U.S. Talks: Eco Day

Fed Firing Risks, Mnuchin Calls Banks, China-U.S. Talks: Eco Day    Bloomberg Welcome to Monday, Asia. Here's the latest news and analysis from Bloomberg Economics to help get your day started:...(read more)

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Q4 GDP Forecasts: Mid-to-High 2s

And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 2.7 percent on December 21, down from 2.9 percent on December 18. The nowcast of fourth-quarter real personal consumption expenditures growth decreased from 4.1 percent to 3.7 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis. [Dec 21 estimate] emphasis added From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Dec 21 estimate] CR......(read more)

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Williams soothes markets, says Fed listening and could change policy

The Federal Reserve is listening to the concerns of markets and open to changing its policy views next year, one its most influential members said on Friday, even while he stood by plans for interest-rate hikes and further paring of the Fed's bond portfolio....(read more)

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Special Report: U.S. military's new housing plagued by construction flaws

Here, near the heart of America's "Tornado Alley," an Air Force contractor built 398 new homes less than a decade ago, bankrolled as part of the U.S. government's vow of safe shelter for the men and women who serve....(read more)

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Republican U.S. senators: Talks under way on government funding compromise

Republican U.S. Senators said on Friday negotiations were under way to see if a compromise could be reached on a government funding bill that the Senate would pass, as the Senate awaited the completion of a vote on whether to take up a House-approved measure....(read more)

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Fed's Williams helps recast some views of Fed when he says it has 'eyes wide open,' is flexible

New York Fed President John Williams took a step toward undoing the blunt blow to markets delivered by the Federal Reserve and Fed Chairman Jerome Powell on Wednesday....(read more)

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Reis: Apartment Vacancy Rate unchanged in Q4 at 4.8%

Reis reported that the apartment vacancy rate was at 4.8% in Q4 2018, unchanged from 4.8% in Q3, and up from 4.6% in Q4 2017.  This ties last month as the highest vacancy rate since Q3 2012. The vacancy rate peaked at 8.0% at the end of 2009, and bottomed at 4.1% in 2016. From Reis: The apartment vacancy rate was flat in the quarter at 4.8% . At year-end 2017 it was 4.6%, while at year-end 2016 it was 4.2%. Both the national average asking rent and effective rent, which nets out landlord concessions, increased 0.8% in the fourth quarter. At $1,440 per unit (market) and $1,370 per......(read more)

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Kansas City Fed: Regional Manufacturing Activity "Growth Slowed" in December

From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Slowed The Federal Reserve Bank of Kansas City released the December Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity slowed, while expectations for future activity edged slightly higher. "Factories in our region reported a drop in production in December but continued growth in orders, employment, and capital spending" said Wilkerson. "Several contacts noted......(read more)

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Personal Income increased 0.2% in November, Spending increased 0.4%

The BEA released the Personal Income and Outlays report for November: Personal income increased $40.2 billion (0.2 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $37.8 billion (0.2 percent) and personal consumption expenditures (PCE) increased $54.4 billion (0.4 percent). Real DPI increased 0.2 percent in November and real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent. The November PCE price index increased 1.8......(read more)

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