Monthly Archives: July 2016

The Reason of U.S. Housing Market Is Good

unduhan-31Housing is doing better. It’s not doing great but it doesn’t have to be right now, for either investors or the economy.

The National Association of Realtors said today that existing-home sales dropped 3.2% in July to an annual rate of 5.39 million units, with the median price rising 5.3% from a year ago to $244,100. That missed expectations for a 5.5 million-sale annual rate.

New home sales, meanwhile, hit a forecast-busting 654,000 units annually, the best in nine years, according to a Census Bureau report Tuesday.  “[It] turned out to be the forecasting equivalent of Katie Ledecky against the field,” Regions Financial chief economist Richard Moody said afterward.

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The news is pretty good in the short term, but not all that huge in the context of time. New home sales are still weaker than in any year since 1992, as the Wall Street Journal’s Nick Timiraos reported yesterday.

Adjusted for population, they’re at about 63% of their 50-year average level — way better than in 2011, but nowhere near heated, Trulia.com (Z)  economist Ralph McLaughlin said. Existing-home sales are better — they’re right about where they were in the late 1990s amid the Internet boom. They’re consistent with a strong economy, but they haven’t matched the soon-regretted peaks of 2007, or even kept up with the population growth since 1998.

The housing market is, basically, good enough to do the job — if the job is to push unemployment a little lower and demonstrate that consumers are willing to spend a little more each quarter and keep the nation’s third-longest expansion since World War II moving.

And that ought to be at least fairly favorable for home-building stocks like KBHome(KBH)  and Pulte Home Group (PHM) , not least because it gives them room to keep growing steadily for a few years before anything like a housing correction. Indeed, the problem with existing-home sales is that there are too few such homes on the market, said Lawrence Yun, chief economist of the National Association of Realtors.

“Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” Yun said in a statement. “Lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”

That’s especially true in the condo market that serves first-time buyers in high-cost markets like California, he said. The pent-up demand is benefiting home builders, though, as recent earnings reports demonstrate.

Luxury builder Toll Brothers ( TOL) said Tuesday its quarterly earnings jumped 69% to 61 cents per share, while revenue rose 23.5% from a year earlier to $1.27 billion. Analysts had expected $1.25 billion, according to estimates compiled byThomson Reuters.

“Our business is really, really good,” CEO Doug Yearley said Tuesday on CNBC. “The pent-up demand is continuing to build.”

Builder stocks surged after the new-home sales data reported Tuesday, bringing the year-to-date return of the S&P Home Builders Select Industry Index to 5%, lower than the gains of the S&P 500. All of that money has been made in the third quarter, as concerns about a recession have begun to dissipate.

Tips to Win Travel Rewards With Hotel Loyalty Programs

images-44The quiet word among savvy frequent travelers is that lately many have shifted their focus from airline rewards programs to hotel programs.

Surprised? Understandably. For decades hotel programs have been the ugly duckling of rewards for travelers. But things are changing. “People usually can use hotel rewards with no problems. With airlines, it’s a different story,” said Jason Steele, a travel rewards journalist based in Denver.

Bluntly put: it just has become very hard to cash in airline miles for free flights, certainly not to desirable locations. Go ahead: try to book a free flight to Hawaii during Christmas. It just is about as likely as winning Mega Millions.

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But what many travelers are finding is that – in an era of full flights – it has gotten difficult to cash in miles for free trips even to less desirable locations, over less desirable dates.

With hotels, it’s totally different. Joe Brancatelli, who blogs at JoeSentMe.com, said, “Here’s the main difference between airline and hotel programs for the average traveler: hotel chains are running at 60 to 65% occupancy. So there’s almost always a room to be had free. Availability of awards is generally wonderful.”

That’s key. You may have 50,000 miles in your United kitty, but you may not be able to spend them on a free flight. On magazines, sure. Maybe seat upgrades. Flights, not so much.

Brancatelli added: “Travelers just do not understand how valuable hotel programs are. The chains are in intense competition all around the world. Plus elite status is easy to get and is useful — free Wifi, some upgrades, late checkout, etc.”

The Global Housing Market

The U.K. is not the only destination of the Chinese buyers. U.S. homes are sought after, too. According to the latest data from the National Association of Realtors, Chinese buyers made up 26.3% of total foreign buyers of residential U.S. property between April 2015 and March 2016, when they bought houses worth $27 billion.

The Chinese were followed at great distance by Canadians, who bought residential property worth $8.9 billion in the period, Indians with $6.1 billion, the British with $5.5 billion and Mexicans with $4.8 billion. Such a big difference in amounts suggests the Chinese buyers are perhaps more than just rich individuals.

Looking at imports of building materials from China, they have increased in the U.S. too in recent years, data from the U.S. Census Bureau show. Between 2013 and 2014, imports of stone, sand, cement, etc. increased by more than 9% and jumped by 19% between 2014 and 2015.

Of course, there is no actual proof that the Chinese buyers gobbling up properties around the world — so eagerly that Vancouver had to impose a hefty tax on foreign buyers to cool off its red-hot real estate market — are one and the same as the Chinese companies that are awash in state stimulus cash.

And yet, going back to 2013, recall that the People’s Bank of China allowed Chinese companies to lend money in renminbi to their offshore branches without any limit and without any requirement for them to first notify regulators.

That essentially meant that companies could transfer money out of China without having to worry about capital controls. Home prices started increasing strongly around the world since around that year.

Of course, this could be a coincidence, and probably is. But still, it makes one wonder.