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January 24, 2018

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Real Estate Research provided
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current issues in the fields of housing

Housing Headwinds

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and real estate economics. Authors
for the blog included the Atlanta Fed's

In a recent post, we described the outlook for housing growth in the Atlanta Fed's

Jessica Dill, Kristopher Gerardi, Carl
Hudson, and analysts, as well as the

district as "slow and steady." In this post, we look at what other Fed districts are
hearing about housing growth and attempt to reconcile those anecdotes with

Assessing the Size and Spread of
Vulnerable Renter Households in

Boston Fed's Christopher Foote and
Paul Willen.

recent signs from the Atlanta Fed's GDPNow.

the Southeast
What's Being Done to Help Renters

In December 2020, content from Real
Estate Research became part of

The most recent Beige Book characterized residential real estate activity as
"constrained across the country." Of the 12 districts, only one (the Federal

during the Pandemic?
An Update on Forbearance Trends

Policy Hub. Future articles will be
released in Policy Hub: Macroblog.

Reserve Bank of Chicago) raised its classification of the pace of residential
construction, and five lowered their assessments. The other districts remained at

Examining the Effects of COVID-19
on the Southeast Housing Market

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little or no change, including San Francisco, whose pace was still strong despite
shortages of land and labor. Indeed, several districts cited tight labor conditions

Southeast Housing Market and
COVID-19

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as limiting new construction.

Update on Lot Availability and
Construction Lending

With labor and, to a certain extent, land market conditions holding back
construction, we might expect the prospects for residential fixed investment (RFI)

Tax Reform's Effect on Low-Income
Housing

in the fourth quarter of 2017 to be dreary. However, recent releases of GDPNow
indicate that residential fixed investment should make a relatively strong

Where Is the Housing Sector
Headed?

contribution to fourth-quarter real GDP growth after being a drag in the second
and third quarters (see chart).

Did Harvey Influence the Housing
Market?

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Interestingly, brokers' commissions are making the largest contribution to RFI,
followed by permanent site (single and multifamily construction) and
improvements. The increase in brokers' commissions reflects the increase in the
real value of home sales that resulted from the acceleration of house prices as
well as from a sharp increase in the number of existing and new home sales
reported for October and November 2017 (see chart).

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An increase in both house prices and the number of houses sold is consistent
with strength in housing demand. We look to the supply of housing to understand
the Beige Book's description of constrained real estate activity. Housing
inventory provides an indication of supply conditions. Eleven Fed districts
reported that residential inventory conditions were tight (the remaining district did
not mention inventory). Several stated specifically that low inventory was
restraining sales and that the low number of available houses is putting upward
pressure on house prices.
Constrained residential real estate and construction activity does not mean that
the sector is doing poorly. It just means that, the housing market's positive
contribution to economic activity could be greater if land and labor market
conditions were more favorable.
The national Beige Book comments are consistent with our view of housing
sector conditions in the Southeast—specifically, that supply-chain constraints
imply that near-term residential investment growth will be steady and measured.
Carl Hudson, director of the Center for Real Estate Analytics

January 24, 2018 in Housing demand, Housing prices | Permalink

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