What we’re reading (4/16)
“The Sky-High Pandemic Housing Market Finds Gravity Does Exist” (New York Times). “[T]here are so few homes for sale that even a slower market is unlikely to create enough inventory to satisfy demand anytime soon. For years the United States has suffered from a chronically undersupplied housing market. Home building plunged after the Great Recession and remained at a recessionary pace long after the economy and job market had recovered. Even today, the pace of home building remains below the heights of the mid-2000s[.]”
“Decade-High Mortgage Rates Pose Threat To Spring Housing Market” (Wall Street Journal). “‘We’ve never seen a time where mortgage rates have risen as quickly as they have and the market hasn’t cooled off,’ said Ralph McLaughlin, chief economist at Kukun, a real-estate data firm…‘If half of our buyers got priced out of the market, we would still have eight buyers for every listing,’ said Nick Painz, managing broker at Re/Max Alliance in Westminster, Colo., a suburb of Denver. ‘The people that think it’s got to stop somewhere, I think they’re in for a rude awakening.’”
“Housing Market Fever Starts To Break In Boise” (Bloomberg). “If you’re wondering where the U.S. real estate market might start to show its first cracks, keep an eye on Boise, Idaho. The pandemic work-from-anywhere revolution transformed it into one of the hottest markets in the U.S., but home prices are leveling off there. Typical home values in Boise rose just 0.4% last month, down from a 4.1% monthly pace in June, according to Zillow data. That makes it the first of the country’s top 100 housing markets to flirt with falling prices this year.”
“The End Of An Economic Illusion” (John Cochrane, Project Syndicate). “Inflation’s return marks a tipping point. Demand has hit the brick wall of supply. Our economies are now producing all that they can. Moreover, this inflation is clearly rooted in excessively expansive fiscal policies. While supply shocks can raise the price of one thing relative to others, they do not raise all prices and wages together. A lot of wishful thinking will have to be abandoned, starting with the idea that governments can borrow or print as much money as they need to spray at every problem.”
“U.S. Bond Market Gives Notice It’s No Longer A One-Way Street” (Bloomberg). “‘It’s an awkward period at the moment for the bond market,’ said Gregory Faranello, head of U.S. rates trading and strategy for AmeriVet Securities. ‘Inflation is at extreme levels and we just don’t know what level it declines to from the peak.’”
