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 ...

A supply chain broken by the pandemic is slowly getting back on its feet, and improvements will continue rippling through the markets well into the new year. Two data releases came out last week that told seemingly conflicting stories about the state of the economy. The ISM Manufacturing survey , a key bellwether of ...

With inflation easing, the current upside-down nature of market rates support the idea of a soft landing for the economy as much as they do a downturn. An inverted yield curve — when longer-term interest rates like the 10-year yield are lower than short-term interest rates like the 2-year yield — has historically been one of the most ...

The car market contributed to supply chain turmoil, and soaring prices helped drive up inflation. Now it’s returning to normal. If you had to point to one culprit holding back the economy over the past 18 months, it would be the auto industry. Supply chain problems like the shortage of semiconductors have contributed to weak economic ...

No matter who controls Congress, the infrastructure bill and cash-flush state budgets will provide fresh inflation fuel to the economy next year. The outcome of the midterm elections has left lingering uncertainty in Washington, including the question of what fiscal policy might look like in the new Congress. But even if Republicans regain ...

Abundant jobs have cushioned the blow of higher interest rates, raising the chance for a soft landing despite the Fed’s aggressive stand against inflation. Higher interest rates are no doubt causing pain to investors and consumers, but the economy has been able to handle them better than anyone thought possible six months ago. The ...

Companies are shielding their workforces from efforts to cool inflation, squeezing profit with the hope of a faster recovery later. All the tightening moves by the Federal Reserve this year to rein in inflation are supposed to lead to less hiring and spending by companies. But there is no law that says the biggest, most profitable companies ...

We're months away from certainty on inflation, so market signals are all we've got — and one is pointing to an interest rate north of 5%. After a widely expected fourth straight 0.75% interest-rate increase next week, there's a growing view that the Federal Reserve will step down to a 0.50% bump at their December meeting. Even ...

Unlike previous crashes, multifamily rentals remain strong, with ample construction to provide jobs and a backlog that should last well into 2023. Surging mortgage rates and uncertainty about the economy have put the housing market on ice. Mortgage purchase applications dropped Wednesday morning to their lowest level in 25 years ...

Inflation watchers have focused on pulling back the labor market, but tenants blinking in the face of higher rents might be the first step toward cooling off the economy. There's been an assumption that before inflation can be tamed and housing prices ease, unemployment must rise significantly. But what if it's the other way around? The ...

Investors may have lots to worry about, but consumers are feeling more confident as gas prices fall, the housing frenzy calms and jobs remain plentiful. It's been three months since the elevated May consumer prices report led the Federal Reserve to adopt a "whatever it takes" mentality to fight inflation. Markets are now bracing for an ...

It might be a sign there will be no broader economic slowdown, but it might also signal faster inflation ahead. It's been a messy year for macroeconomic analysis. Wild swings in inflation, energy prices, the stock market and consumer behavior have led to mistakes by companies and investors alike. Retailers have gotten caught in these shifts, ...

Falling gas prices and an inventory glut will help households that suffered the most as inflation surged. Surging inflation has been punishing for lower-income households over the past year. Two developments — falling gasoline prices and excess inventories of consumer goods — should bring some relief to those struggling the most with high ...

Americans are working more hours than before the pandemic, pointing to robust growth rather than a declining economy. Checking in on the health of the economy used to mean a quick glance at a handful of indicators: unemployment and inflation rates, a couple quarters of gross domestic product growth, housing market sales, maybe the ...

More layoffs used to be considered a bad thing for the economy, but that was before a shortage of workers began adding to inflation. The Federal Reserve has talked a lot about its goal of a soft landing for the economy as it raises interest rates to fight inflation, but there hasn't been as much talk about what that would look like for workers. ...

With the home becoming an increasingly acceptable office for white-collar employees, new graduates won't have to make a beeline for the big city to find high-paying jobs. It's now been two years since the rise of remote work enabled people to start moving out of the big cities, transforming the geographic demography of the United States. And ...

The company’s massive size and reach make it a good bellwether, and its latest earnings suggest supply and demand are coming back into balance. If you want to blame one company for the surge in inflation over the past year, blame Amazon. When e-commerce demand leaped at the onset of the pandemic in 2020, the retailer decided to expand capacity ...

Worker shortages have made companies realize mass layoffs shouldn’t be the automatic response to every recession. The economic rebounds following both the 2001 and 2008 recessions came to be known as jobless recoveries. Demand was slow to recover so employers held back on hiring — which for companies, at least, turned out to be the right ...

Rising prices will help some real estate markets avert a much worse potential outcome in a post-pandemic world. It's painful when prices are soaring for everything, but there are at least two segments of the real estate market where inflation may actually be easing the transition to a new status quo. As the U.S. embarks on its third year ...

Labor demand is poised to ease, which will help the Federal Reserve tame inflation with less risk of triggering a recession. The U.S. has been creating more than 400,000 jobs every month for a year now, but we should expect that pace to start slowing, probably beginning this quarter. And while normally a slowdown in job creation would be seen ...

Mortgages are safer, homebuilders and banks are more conservative and interest rates don't wield the same economic power as they did in the 2000s. The Federal Reserve is getting more hawkish as it seeks to control inflation, but that's not necessarily going to translate to a faster, bigger impact. The U.S. economy has evolved since the ...

The top end of the wealth scale won't need to curb spending thanks to soaring home equity and fattened savings, while higher prices squeeze renters at the bottom. Remember back in 2020 when everyone was talking about a K-shaped economic recovery? White-collar workers who could do their jobs from home stayed employed, while lower-income ...

Soaring prices and low inventory are causing headaches for homebuilders and buyers but benefiting owners — and therein lies the Fed’s predicament as it seeks to lower inflation. If you want to know what stagflation looks like, check out the housing market. The conditions that existed during the 1970's — high inflation and stagnant output — ...

War in Ukraine is combining with persistent inflation to create a new political dynamic in Washington where only bipartisan proposals for the economy will stand a chance. The short-lived era of progressive economic policy making is dead. War in Ukraine has led to at least a short-term surge in the price of commodities like oil, and has made ...

There's understandably a lot of concern about inflation — and consumers want to know who to blame for it. U.S. companies are showing that they've got pricing power and know how to use it in this environment. That makes them an easy target for consumers — and politicians' — ire. But for the most part they're merely raising prices to keep up ...

Letting inflation run hotter than planned is a better outcome than crushing economic growth with overly severe interest rate increases. Coming into this year, the hope was that supply chain improvements and modest interest-rate increases from the Federal Reserve would return the U.S. economy to the healthy expansion mode it enjoyed in ...

Some of the country's largest urban areas have recovered more slowly from the pandemic. Now rising interest rates will hurt them most. The pandemic hit the U.S. economy unevenly, with some places hurting more than others and recovering at different speeds. As the Federal Reserve gets ready to start raising interest rates, we're about to see ...

Home to corporate behemoth Walmart, a rising state university, and awash in philanthropy money, this Texas neighbor is home to a new crop of urban hotspots.Ambitious young college graduates are looking for an affordable home base where they can build their families and careers. Here's a place that may not (yet) be on their list: Arkansas. For ...