Here is an update to most of the charts I think are important to the housing market in Des Moines & surrounding areas.
First housing prices. They remain steady although the yearly growth rate does turn positive.
Next Employment. I’m going to stop including the chart of the unemployment rate, since it is so misleading. The rate continues to go down, which “appears” to be good news, but the number of employed people is also going down. This is because many people have stopped looking for work (discouraged workers) or have been on unemployment so long they no longer qualify. Lets do ourselves a favor and just look at total employment from now on, especially when looking for the direction of future housing prices.
The yearly growth rate creeps up, but is still negative, which means more people are losing jobs than gaining them.
Construction & manufacturing employment, another good leading indicator for housing prices. Both remain quite strong. Hopefully a sign for the future of total employment.
More leading indicators… residential construction permits. You need a permit to build, so its an indicator of how home builders feel about their future prospects. Up slightly, and the yearly growth rate turns positive.
Cost of new home construction gains and stays at about 5.5% on a yearly basis. Not good news for home builders.
And finally, interest rates. I heard someone from the Iowa Association of Realtors on the radio the other day say something to the effect of “housing is turning the corner due to low interest rates”. I had to laugh in anger, and think “if interest rates played such a large role in supporting the housing market, why haven’t prices been going up the past 3 years? It’s about jobs stupid”. Then I apologized to the radio for calling it stupid.
Have a great holiday everyone. There is hope out there for housing, but there are also headwinds. Want to know which are stronger? Give me a call.
Loading tweets...