We continue our real estate research with a study on metropolitan affordability in the rental and mortgage markets. Once again, we tap into Zillow Group’s wealth of data and use a data set that includes mortgage affordability, rental affordability, and price-to-income ratios for the five most populous US cities with comparison to the national median.
Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later. The monthly data points are preserved as faint dots. The trends are illustrated with 6-month moving averages of data divided by the Census Bureau's mid-month population estimates.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for November new residential building permits. The latest reading of 1.201M was a decrease over a revised 1.260M in October and below the Investing.com forecast of 1.240M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for November new residential housing starts. The latest reading of 1.090M was below the Investing.com forecast of 1.230M. The October count was revised upward by 17K.
The latest Manufacturing Index came in at 21.5, up from last month's 7.6. The 3-month moving average came in at 12.9, up from 10.0 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 52.6, an increase over the previous month's 29.3.
We've updated this series to include this week's release of the Consumer Price Index as the deflator and the November monthly update. The latest hypothetical annual earnings are at $36,506, down 13.4% from 44 years ago.
The Philly Fed's Aruoba-Diebold-Scotti Business Conditions Index (hereafter the ADS index) is a fascinating but relatively little known real-time indicator of business conditions for the U.S. economy, not just the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey, and Delaware. Thus it is comparable to the better-known Chicago Fed's National Activity Index.
According to the Census Bureau, 84% of U.S. citizens live in Metropolitan Statistical Areas - defined as a region with at least one urbanized area of population 50,000 or more. Here we look at home values in the top five metro areas over a 20 year period using data from Zillow Group. We focus on Zillow Sales prices and the Zillow Home Value Index, a house price index that uses Zillow data.
Let's have a look at a long-term perspective on Treasury yields. The chart here shows the 10-Year Constant Maturity yield since 1962 along with the Federal Funds Rate (FFR) and inflation. The range has been astonishing. The stagflation that set in after the 1973 Oil Embargo was finally ended after Paul Volcker raised the FFR to 20.06%. Last week's rally in yields has been much more dramatic than the 1.98% weekly close - Thursday's 10-year note closed at 2.15%, a 32 BPS increase from before the election.
Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? At this point, seven years later, the S&P 500 has set an inflation-adjusted record high. Let's examine the past to broaden our understanding of the range of historical trends in market performance. An obvious feature of this inflation-adjusted series is the pattern of long-term alternations between up-and down-trends.