Here's why the housing market could see more action this year - and what it means for affordability
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Phil Rosen
Jan 30, 2023, 17:48 IST
REUTERS/Mike Blake
Welcome back, readers — Phil Rosen here. On this day 54 years ago, the Beatles played their last-ever gig on a rooftop in London.
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And just the same, today marks my last Monday writing to you from California this winter.
That's not to say I'm on par with the Beatles, but I've never really believed in coincidence. I'll leave that verdict for you.
Now — into the housing market we go.
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1. The recent jump in lumber prices suggests housing activity may be crawling back to life. The key building commodity, which was one of the worst-performing commodities of 2022, is up 33% so far this year.
So buying a home is now slightly more reasonable, with rates easing from recent highs — but "more reasonable" is relative, and with prices still elevated, that doesn't mean affordable.
Prices are expected to climb modestly this year, albeit at a slower pace than the 10% jump seen last year.
Earlier this month, the National Association of Realtors reported that US existing-home sales fell again in December — the 11th consecutive monthly decline — to round out the weakest year for sales activity since 2014.
Sales of previously owned homes, which make up the majority of the housing market, plunged 17.8% last year compared to 2021, the report said.
Nadia Evangelou, senior economist for the NAR, told me recently the housing market could turn around in 2023, but unaffordability would remain a prevailing theme.
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"There's no breathing room for first-time homebuyers," Evangelou said. "The share of first-time home buyers may shrink even further from the 2022's all-time lows. Both rents and home-owning will become more expensive… the continued housing shortage will not allow home prices to drop."
People sit outside the New York Stock Exchange (NYSE) in New York City, U.S., September 15, 2016.Brendan McDermid/Reuters
2. US stock futures fall early Monday, as investors brace for a week of interest-rate decisions and big corporate earnings reports. Here are the latest market moves.
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3. Earnings on deck: Canon, Ryanair, and more, all reporting.
5. The recent stock rally is driven by optimism that things aren't as bad as feared — but a Wells Fargo strategist said that may not last. "I think right now, we're getting a bit of that relief, but when you really lower the bar it's hard to trip over," Anna Han told Bloomberg. She added that stocks' upbeat January has been "odd to see."
6. Elon Musk said he's worried about the Fed "crushing" the value of the entire stock market. In Tesla's latest earnings call, the billionaire warned that policymakers pose "quite a serious danger" to markets. Get the full details.
7. Asia's richest person doubled down on his defense against fraud allegations ahead of a massive share sale. Adani Group issued an 18-page presentation responding to short-seller Hindenburg's accusations. It's titled "Myths of Short Seller."
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8. BiggerPockets' housing-market guru shared three real-estate investing strategies to use as home prices around the country take a hit. The current uncertainty in the housing market can be paralyzing for investors, but there's still opportunities to make money, he explained. He also shared two top cities to invest in right now.
9. This financially independent 34-year-old said that building wealth through real estate is a numbers game. It's important to be "as efficient with your capital as possible," James Berkley explained. He shared how to win the game by avoiding "lazy money."
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