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New projections from the Bureau of Labor Statistics (BLS) indicate significant employment growth for the construction industry over the next decade. In this article from the NAHB Eye On Housing blog, Robert Dietz of the National Association of Home Builders reports on some of the details of the BLS employment projections.
According to the BLS, the construction sector is expected to add 790,400 jobs through 2024. This places the construction sector fourth among major industries. The health and social assistance sector leads with a forecasted 3.8 million job gain, followed by professional and business services (1.9 million) and the leisure and hospitality sector (941,200).
In percentage terms, the construction sector ranks second in terms of expected growth. The construction industry is expected to experience 1.2% compounded annual growth for jobs over 2014-2024. Only the health and social assistance industry (1.9%) exceeds this growth rate.
The projections utilize a number of structural variables regarding the future growth of the economy. With respect to construction activity, the BLS models residential fixed investment as growing at a 3.7% annual rate, with 7.7% for single-family and 2.2% for multifamily. Nonresidential structure investment is modeled as growing at an annual 3% rate.
The BLS report provides additional detail at the occupation level of analysis for the 2014-2024 period. Within the construction worker occupation, the top growing jobs include solar photovoltaic installers (24.3% total growth over ten years), iron/rebar workers (23.4%), insulation workers (19.4%), brickmasons and blockmasons (17.9%), electricians (13.7%), and earth drillers (13.6%).
This BrightNest article from Amy Thomson offers some valuable advice on cleaning those frequently-touched things around your home that could easily spread winter colds.
Your co-workers have already started calling in sick. Your partner complains of a sore throat. You sneeze. Is that because you haven’t dusted this week or because you’ve already contracted this season’s case of the cold?
Don’t panic. When it feels like everyone around you is taking a sick-day, stay safe at home and clean these frequently-touched (and therefore germ-tastic) spots:
Fridge Handles. The average fridge handle is five times filthier than a toilet seat! It’s also a magnet for everything greasy that happens in your kitchen as you reach for ingredients while cooking or eating (which means cold germs are gonna end up there, too). Grab some disinfectant spray and sterilize your fridge handles.
Door Knobs & Cabinet Handles. Flu viruses can last up to 24 hours on hard surfaces. Although that may not seem like a lot, if someone in your house is sick, it’s likely that you’re both going to use the same restroom or open the cup cabinet. Use a Clorox bleach wipe to protect yourself.
Light Switches. Avoid spraying a disinfectant directly on your light switch to protect the electrical outlet. Instead, apply the disinfecting spray to a rag or q-tip to clean the light-switch plate.
Other things around your home that you should make sure to keep clean: your remote controls, your sponges and your cell phones.
Which cities will millennials call “home” in 2016? As part of the realtor.com 2016 real estate forecast, this article from Yuqing Pan predicts the U.S. markets that are most likely to see a surge of millennial buyers next year.
Is there any part of U.S. life that hasn’t been dramatically altered by the millennial invasion? This vast group of young Americans has already altered general perceptions of job place behavior, pop culture, media consumption, self-entitlement, and acceptable facial hair. But nowhere is its impact greater felt than in the housing market – and that impact is getting bigger all the time. Numbering 43.5 million, the older group of millennials (aged 25 to 34) makes up 13.6% of the U.S. population but fully 30% of the current population of existing-home buyers.
In 2016, millennials have the power to remake the real estate landscape wherever they choose to settle. But where will that be?
You might assume that young people are naturally drawn to the nation’s largest and most renowned metropolises such as New York City and Los Angeles to jump-start their careers and enjoy the full-throttle excitement of big-city life. And you’d be right – at least partly. But here’s the rub: Increasingly, they can’t afford to live in these places. Sure, Brooklyn may be a notorious hipster/millennial mecca, but how many 30-year-olds can afford $1.75 million one-bedroom co-ops? No wonder shrewd young home buyers are increasingly turning to cities that are relatively affordable and have lots of jobs and maybe even a trendy atmosphere all their own.
Here are some of the cities that top the realtor.com ranking of the 10 markets most likely to see a surge of millennial home buyers.
Atlanta. How did the southern mecca that proponents and detractors alike call “Hotlanta” make the very top of our list? Well, there’s the nation’s best hip-hop scene, a vibrant and ever-changing nightlife, and tons of job opportunities. Oh, and did we mention affordable housing? It’s little wonder that Atlanta was ranked the best city for new college graduates and young professionals by MarketWatch, due to its high median starting salaries and cheap, cheap, cheap living costs.
Austin. Is there a city more hipster-plentiful than Austin, Texas? With a 24% higher share of 25- to 34-year-olds than the nation as a whole, Austin is an ample showcase of what young creatives and entrepreneurs are cranking out these days (especially if you come for the city’s South by Southwest festivals of film, interactive media, and music). It’s now known as a center for tech jobs and startups, as well as for pharmaceutical and biotechnology companies. The city’s latest unemployment rate was only 3.3%.
San Diego. A strong economy led by the biotech industry, high-quality universities, year-round mild weather, gorgeous beaches with rich wildlife – do young people need more reasons to move to San Diego?
Seattle. The headquarters of Microsoft, Amazon, and many other tech companies large and small, the greater Seattle area has welcomed an influx of educated, young tech workers, which contributes to its uniquely cool culture.
Houston. Twenty-six Fortune 500 companies call Houston home, and the abundance of career opportunities attracts millions of young professionals every year. By some metrics, it’s the nation’s top urban job creator. From 2000 to 2012, Houston saw a 49% increase in its percentage of college graduates aged 25 to 34, according to City Observatory.
Denver. Mountains, fresh air, sunshine, tech jobs … Denver checks off many of the boxes for the features millennials want in a place to live.
Charlotte. The Queen City ranks No. 2 among the country’s 25 largest cities for population growth from 2010 to 2013, topped only by Austin.
The latest American Community Survey, released by the U.S. Census Bureau, provides some interesting insight on renting and home ownership in America. In this article, Kriston Capps of CityLab highlights some of the details of the survey, and explains why more renters should actually be purchasing homes today.
Five years into the recovery, renters are still paying the price for the Great Recession. Rents are high and rising across much of the nation, at least in the places where many people live. That’s not surprising. What’s fascinating is the flip side – the changes happening in homeownership.
The U.S. Census Bureau has just released data from its regular five-year American Community Survey. The survey provides detailed statistics on all kinds of factors in American life, including college graduation rates, poverty rates, segregation and integration, and housing data – lots and lots of housing data.
The latest batch shows that rents are red hot in the nation’s largest and fastest-growing cities. That’s something people who live in those places know from experience. The median gross rent is more than $1,000 in 182 counties, split fairly neatly between the South (65 counties), West (62), and Northeast (49). In the Midwest, where rents are a lot cheaper, just six counties boast such high rents.
The ACS data show that median gross rent increased in 719 counties between 2005–2009 and 2010–2014, while the median gross rent decreased in 204 counties. Renters have returned to cities in droves. Housing starts are still at near-historic lows five years into the recovery – even after median house prices returned to pre-crisis levels. And for a number of reasons, Millennials aren’t forming new households even when they move out of their parents’ homes.
So it’s to be expected that homeownership rates aren’t up. Between 2005–2009 and 2010–2014, the percentage of homes that were owner-occupied fell in 931 counties. The number ticked up for just 115 counties. Overall, there was no change in homeownership figures across most of the nation – in 2,096 counties, to be exact – but those places aren’t where most of the nation lives. This all squares: Where renting is waxing, owning is waning.
What’s more surprising is what’s happening with the costs of homeownership: They’re falling, and they’re falling all over the place. Between 2005–2009 and 2010–2014, the median monthly costs of owning a home decreased in 1,163 counties. In another 1,798 counties, the change wasn’t significant. The costs of homeownership – including mortgage, insurance, loan fees, and so on – rose in just 177 counties. Many of those overlap with the 171 counties where owners paid mortgages of more than $1,750, and a lot of these counties (63 counties, nearly 40 percent) are located in the Northeast.
Put more simply: More renters should be buying homes. It would be the cheaper option for a lot of them. Except for in the cities where housing prices are simply soaring (New York, San Francisco, and Washington, D.C., to name three), more renters ought to be availing themselves of homeownership.
The Federal Reserve is widely expected to raise interest rates in December, for the first time in nearly a decade. This Bankrate article from Katherine Reynolds Lewis takes a look at how rate fluctuations can affect mortgage rates – and other parts of our financial lives.
“The Federal Reserve has its fingers in your pocketbook to a greater degree than the IRS,” says Michael Reese, a CFP professional in Traverse City, Michigan.
The interest rates you pay and earn, the availability of credit and even your prospects in the job market are linked to the projections and judgments of Federal Reserve Board Chair Janet Yellen and the other members of the policymaking Federal Open Market Committee, made up of Fed board governors and reserve bank presidents.
They meet in Washington to set monetary policy, primarily by raising or lowering the Fed’s target for what’s called the federal funds rate.
The Fed’s mission is to foster economic growth without raising inflation. “The Fed has a dual mandate. They want to have low and steady inflation and a strong labor market,” says Gus Faucher, senior macroeconomist with The PNC Financial Services Group.
When the Fed lowers the federal funds rate, lenders can finance home loans more cheaply. As a result, they can reduce the interest rates they charge for a fixed-rate mortgage.
In recent years, the federal funds rate has been near 0%, as the Fed has attempted to stimulate the housing market.
“The Fed is making homes affordable at all-time levels with low interest rates on mortgages,” Mervine says. “A lot of people are underwater, but if they can save and pay down their prior mortgage, they can refinance at extremely low rates.”
The Fed can even control the shape of the yield curve, or the relation between interest charged for 1-year loans, 3-year loans, 5-year loans and so on. “If they want to bring down 10-year rates, they’ll go out and buy 10-year securities,” says Oghoorian.
Mortgages are pegged to the 10-year Treasury rate, because refinancings and early payoffs effectively give a 30-year mortgage a 10-year lifespan, Oghoorian says. Competition and market conditions also affect rates.
The Fed’s actions also influence the availability of credit. When the Fed is boosting the money supply – for instance, by buying government bonds from the market – lenders are more willing to extend credit.
At the 8 regularly scheduled FOMC meetings a year, committee members decide how many securities to buy and at which maturities, after they pore over data and reports from across the country on the labor market, inflation and economic growth.
The committee then unveils its new target range for the federal funds rate, currently a record-low 0%-0.25%, and shares its members’ economic projections in an announcement closely watched by traders and policymakers around the world. Within seconds, financial markets begin to adjust, affecting your pocketbook in numerous ways.
The Fed’s actions indirectly have an impact on the prices you pay at the grocery store, gas pump and other retail outlets.
That’s because the cost and availability of money affect people’s willingness to pay for goods and services. When money is cheap and plentiful, there’s more demand and prices tend to rise.
“If you’ve been on the fence about buying a home, 2016 is the year to take the plunge,” according to Kathryn Vasel of CNN Money. This article outlines 4 of the reasons why next year will be a great year to become a homeowner.
A number of factors are coming together, making next year a good time to buy.
Real estate values have been on the rise for a while, but are likely to slow their pace next year. Prices are expected to rise 3.5%, according to Zillow’s Chief Economist Svenja Gudell. Buyers who’ve been stuck behind the wave of rising prices may finally get the chance to jump in. And that could lead to a flood of buyers, said Jonathan Smoke, chief economist at Realtor.com.
“We have the potential for about six million home sales just through the months of April through September; that is basically impossible to do,” he said.
The new home market is also expected to grow in the coming year with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers.
The Federal Reserve is widely expected to begin increasing interest rates soon, which means the window for record low mortgage rates is closing.
While rates are expected to go up gradually, higher rates push up borrowing costs and monthly mortgage payments.
“You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better,” said Smoke.
Rent prices are expected to continue to climb in the new year, which means in most cities, buying will be cheaper than renting.
Following months of speculation, The Federal Reserve will raise rates for the first time in a decade in December. This article from Andrea Riquier of MarketWatch highlights some of the reasons why the higher rates will have little affect on the increasing demand for homes.
While most economists – and Fed officials – believe the overall economy is strong enough to weather a small interest rate rise, there’s still some concern about specific sectors, like housing.
Friday’s jobs report made it all but official. The central bank will raise rates for the first time in a decade at its December policy meeting, to be held in two weeks.
But analysts say this time is different.
“We think that the fact that they’re ready is a reflection of an improving domestic economy” said Lynn Fisher, vice president of research and economics with the Mortgage Bankers Association. The jobless rate is at a 7-year low and wage growth is starting to heat up, Fisher pointed out. Both will buoy demand.
Even after Fed “liftoff” in December and a second increase in the second quarter, MBA expects mortgage originations to rise 10% and forecasts a 15% jump in housing starts in 2016.
Steve East, chief economist and market strategist for Height Securities, is also buckled in for liftoff in December. But East doesn’t think the Fed’s moves will have much impact on the broader rate market. “It’s more clear that the Fed is going to raise rates than that the long end is going to go up because presumably some rate hike cycle is priced in,” East said.
Even if the Fed’s actions do hit the mortgage market, East said, “I don’t think a 25 basis point increase in mortgage rates is going to make a difference in demand.”
Consumers seem to agree. When online brokerage Redfin conducted a survey in September, only 5% of respondents called rising rates a concern. And that same survey showed that demand hadn’t let up at all: rising house prices and competition from other buyers were the two biggest concerns.
Just as the bond market has priced in some of the Fed’s expected increases, consumers are doing the same, said Redfin Chief Economist Nela Richardson. It’s “embedded in the consumer mindset,” she said. “They know about rates. They also understand in a very savvy way that rates aren’t expected to rise quickly.”
Though the weather outside may be frightful, selling a home during the challenging winter months can actually end up being quite delightful. This U.S. News article from Jeff Brown offers some reasons why.
When it comes to buying or selling a home, conventional wisdom dictates that winter is lousy timing. You can’t show or see a home at its best when the weather is crummy.
Sellers face a shortage of buyers, and buyers find there aren’t enough homes to choose from. Considering that a home is a big piece of your investment portfolio, one would think it’s a difficult season to enter the real estate market.
Except that isn’t necessarily so.
If a job change or new baby forces you into the real estate market in winter, or that’s when the itch to move happens to strike, you may find that conditions aren’t as bad as you’d thought – and there might even be an upside.
Serious buyers, motivated sellers. “There are many benefits to keeping your home on the market during this perceived downtime,” says Rhonda Duffy of Duffy Realty of Atlanta. Among the most important, she says, is a fact that distinguishes real estate from almost all other markets: “It only takes one interested buyer, and you might miss the opportunity if you pull the listing during this time of year.”
For obvious reasons, winter is a bigger negative in the North.
“In New York City and the Northeast, spring still remains the best time for selling your home quickly and for a competitive price,” says Sam Heskel, president of Nadlan Valuation, an appraisal firm in Brooklyn. But he does note an upside for sellers: There are fewer tire-kickers in winter, when people don’t buy unless they have a compelling reason. “Sellers typically find that off-season buyers may be more focused and ready to buy a home,” he says.
Take advantage of the snowbirds. Winter is less of a negative in the South, and can in fact be the best time to buy or sell in winter vacation areas like Florida or the Rockies, says Debbie DiMaggio, a Realtor and author in Piedmont, California. “Selling a home during the winter season in Aspen, Vail or Whistler, for example, might be an opportune time, while skiers and snowbirds are on holiday,” she says.
Interest rate hikes are around the corner. Another reason to consider buying or selling this winter is the series of interest rate hikes the Federal Reserve is expected to start in December. Although the pace is likely to be slow, mortgage rates could start drifting up. As a buyer, you wouldn’t have as much to spend if rates were higher. That means that as a seller, you might have a hard time getting top dollar.
“The fear of a mortgage rate increase will be one of the biggest drivers of winter purchases this year,” says Doug Perlson, founder of RealDirect, a discount real estate brokerage in New York.
Holiday baking. If you’re in the North, bare trees and dirty snow will indeed detract from your home’s curb appeal, so experts say it’s especially important to make the inside as inviting as possible.
Old standards like a roaring fire or the smell of baking cookies can enhance winter appeal. The thermostat should be set at a comfortable level, even if the house is vacant, and the driveway and walkways should be well-shoveled. Your listing should include lots of spring and summer photos. Some tasteful holiday decorating makes sense, too.
Who’ll be on the move to a new home next year, and where will they be moving to? This U.S. News article by Susan Johnston Taylor looks ahead to see what the U.S. housing market will look like next year.
At the close of last year, many real estate experts predicted the U.S. Federal Reserve would raise interest rates in 2015. That prediction never came to be, but even if rates rise later this month or next year, Ralph McLaughlin, a housing economist at Trulia, doesn’t think it will scare away many buyers.
If rates do increase, it could be as little as a quarter percent. McLaughlin doesn’t expect that to have a big impact on the market, but it could temper home price growth, “which is good news for prospective homebuyers,” he says. “Interest rates won’t have much of an effect on the ‘rent versus buy’ math,” he explains. “Buying would still be cheaper than renting in most metros around the country.”
The threat of last year’s rumored rate increase propelled some prospective buyers into action, but Nela Richardson, chief economist for national real estate brokerage Redfin, doesn’t see that same pattern repeating itself. “Buyers now don’t seem to be all that spurred or driven by a rate increase,” she says. “That lack of urgency will translate into next year’s housing market. There’s interest, but there’s not a lot of inventory to buy.”
Here’s a look at other real estate trends to expect heading into the new year.
As the Northeast and West Coast cools, McLaughlin expects the “bargain belt” (metro areas in the South) to boom in the coming year. “In metros like Winston-Salem, [North Carolina], we’ve seen the biggest year-over-year increase in how quickly homes move off the market,” he adds.
Michele Silverman Bedell, owner and CEO of Silversons, a residential real estate agency based in Westchester, New York, also sees buyers migrating south. “A lot of people are thinking about selling in the Northeast,” she says. “A lot of baby boomers, and even young people, are thinking of moving south to be out of the cold.” It doesn’t hurt that housing is more affordable, too.
As some buyers get priced out of city centers, they’re looking at suburban housing – but in a different light than in the past. “People’s preferences have started to change,” says Svenja Gudell, Zillow’s chief economist. “They’re searching for amenity-rich suburbs [and] choosing this type of housing over the cul-de-sac in the suburbs.” These amenities might include easy access to grocery stores, dry cleaners and other conveniences near home.
“Walkability factor is a big trend,” Bedell adds. “A lot of [buyers] choose to live in areas that are close to stores, trains and highways where they can have a lot of their conveniences.” She says young families often want suburbs that still offer an urban feel.
Richardson predicts that some Gen Xers, especially those with growing families who haven’t bought real estate in the past, will finally enter the market next year. “They’ve had some steady income, and they haven’t been too affected by the earlier downturn in the labor market,” she says. “They may have missed out on buying at the bottom, but they could be ready to buy next year.”
