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US home construction surges 22.6%, third monthly increase

159 points by apsec112 6y ago

marmshallow 6y ago
Hotel renovations are on the rise too, according to my landlords who are interior decorators.
- just-juan-post 6y ago
  Now is an excellent time to do them. Travel is down and overall inconvenience to guests is minimized (because there are fewer overall guests). Had they the logistics I was hoping they would do more road construction during March April May when traffic was almost non-existent.
  - godot 6y ago
    It's a good point but back in March the coronavirus was less understood. We didn't know that they were less likely to spread outdoors. We didn't know if the virus was really airborne or not. We didn't know masks helped because they were commonly spread by droplets. (Ok, a lot of the world did, but America didn't.) If road constructions had to be done in groups (likely?) then it was putting construction workers in front of an unknown set of risks. I think we understand all those things a little better now so in retrospect it may have been a good idea.
hanniabu 6y ago
They didn't state any theories on why we're seeing an increase. Is it people spending their vacation money on their home since they can't go anywhere? Is it because they're working from home now and can't stand looking at that fix/upgrade they've been putting off forever? For those here doing work on your home, why now?
- hoka 6y ago
  Cheap labor maybe from desperate contractors/handy workers? Low rates?
- JMTQp8lwXL 6y ago
  It's up a large percent because it fell a large percent at the beginning of Covid. It's a non-story.
  - samatman 6y ago
    Misleading, yes. Industries recovering to pre-pandemic levels is anything but a non-story. There's nothing inevitable about that happening right now. It's news.
- colordrops 6y ago
  My belief is that many renters who have the means to buy a house but have been putting it off have now decided to look for homes because they are stuck in their rental all day and can't do with it what they want. Also, many people are moving to other cities now that they can work remote, and a certain percentage of these people will purchase new homes. These cause a shortage of inventory, so the response is to build homes. Furthermore, interest rates are very low and there is a perception that this won't last, so people are scrambling to get a loan. I believe this because I am one of those people and I know several others in similar situations. I'm in escrow right now.
  - cinquemb 6y ago
    This is true, I'm waiting to buy (cash, no mortgage) still, not enough owner bankruptcies yet for me. I can wait until things can no longer operate under "extend and pretend".
    - polotics 6y ago
      The market can stay irrational for much longer than you can stay solvent and/or alive.
      - cinquemb 6y ago
        I've been working remote for 5 years, and I live in ~90m2 apt in jakarta paying what i had to pay to live in a 3 bdr apt in boston with 2 other grown men… made enough long tail risk on HY trash, going into the "pandemic", and will make more again when the bottom falls out and load up on all the garbage for ~8.5 cents on the dollar (current amount of HY that is collateralized coming due within then next 4.5-5 years). I hope it goes on longer, more time to build up more leverage selling trash to folks who believe oft repeated things as if they were the word of god.
        colordrops 6y ago
        I must admit I'm an engineer and not a financial person, and am having a hard time understanding this. Are these correct: long tail risk: assets that have problems that take a long time to affect the price HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly trash: low priced stocks for crappy companies bottom falls out: market takes a dive garbage: same thing as trash collateralized HY coming due: investments backed by assets that will default leverage: money "oft repeated things": aphorisms about finance that are often wrong, in this case the poster you replied to's comment. I'm probably wrong on half of this and I still don't really get what you are saying. Excuse my ignorance.
- bradlys 6y ago
  I'm pretty sure it's in the first line of the article. > Construction of new U.S. homes surged 22.6% last month as homebuilders bounced back from a lull induced by the coronavirus pandemic. "bounced back" being the takeaway. It's just bouncing back to somewhat normal levels after it being down a lot.
- alasdair_ 6y ago
  It sounds like it’s a big deal, and it’s been all over the media, yet US housing starts are still below the levels seem in February 2020, so it’s more a return to normal than anything. https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts That being said, lumber prices are up 50% for just six months ago.
  - aaomidi 6y ago
    > That being said, lumber prices are up 50% for just six months ago. How much of this is because of wildfires causing disruptions?
    - foota 6y ago
      I don't think there's that much logging in california, is there? This site[1] has an outdated table. California was 6% of lumber production in 2015. 1: https://oregonforests.org/blog/oregon-number-one https://oregonforests.org/blog/oregon-number-one
      - nostrademons 6y ago
        The areas that are burning are not really large timber producers. The CZU fire is largely in protected state & county parks. The SCU and LNU fires are largely in ranch grassland & chaparral, frequently used for grazing cattle. Christmas season may be a bust though - a lot of the Christmas tree farms in the Bay Area are in areas threatened by the CZU fire. Most of the timber production in California comes from way up north, in the Eureka area and in the Sierra Nevadas. This area is somewhat resistant to fires since it gets so much more moisture and precipitation.
      - aaomidi 6y ago
        > I don't think there's that much logging in california, is there? No idea was just thinking out loud
    - maxerickson 6y ago
      Uncertainty is bad for the supply chain. Saw mills aren't sure they are going to buy logs and living trees are better than rotting logs and so on.
- 0DHm2CxO7Lb3 6y ago
  My guess, people are moving away from the cities out to the suburbs because the great thing about the cities are all the social events, restaurants, and activities which are mostly shutdown and a lot of people don't need commute to work since they work remote now. So might as well move out from an apartment into a bigger house. Then there might also be a fear of higher crime, taxes, etc
  - jupiter90000 6y ago
    This theory doesn't make a lot of sense to me, I've heard it a few times though. Why would someone buy a house away from the city during a temporary pandemic shutdown, assuming when things eventually open up again more in say max a year or two, they will need/want to be back in the city? I mean permanent remote work is one thing, I guess, but everything else that has 'gone away' hopefully will not be that way permanently (?)
    - adjkant 6y ago
      Not sure that I buy the theory either at the macro level, but I think one thing I have personally seen/heard of is people who are now realizing how much they don't like the city life (even when things are open) and the pandemic is the straw to break the camel's back here and convince them to go elsewhere to try something else. The key is that it's not temporary for them. Even the people that are there for work and already knew their city reality may also be realizing their gained happiness out of the city is worth more than the financial boost of their job in the city.
    - tal8d 6y ago
      I'll be very surprised if things get much better anytime soon, certainly not before the end of the year. Maybe two years from now... but I wouldn't bet on it. I live in a city where some questionable calls were made with regard to rioters, so I'm eager to put some distance between that and myself.
    - bluGill 6y ago
      Where you live is a compromise. With the city benifet gone but not the suburban ones the suburbs look attractive to people who are on the fence anyway.
- jb775 6y ago
  Rent prices are sky-high, there's social unrest in large cities, interest rates are crazy low, and many companies are now ok with remote working. It's a good time to invest in the suburbs if you can find a decent price.
ngngngng 6y ago
There are 10 homes being built within a quarter mile radius of me here in the mountains of Utah. These lots have stood empty for decades, with one or two homes going up per year. It makes no sense to me why they are all building now. Two of these homes are literally some of the largest homes I've ever seen in person. One is 10,000 sq ft, one is 20,000 sq ft. Unfortunately, with very few exceptions, they're all being built by retired "empty nesters". My wife and I are always hopeful that families with young kids will move in so they can be friends with our children. But wealthy rural communities are pretty inaccessible to young couples starting families. Funny, while so many in this community are discussing moving out into cheap rural areas, I'm longing for neighbors my age and friends for my kids and weighing moving to a city.
- ponker 6y ago
  I could have moved into a 10,000 square foot house in Utah but wouldn’t want to normalize that for my kids. Why not just a regular family suburb somewhere? You don’t have to go all the way to the city life to get neighbors with kids.
  - ngngngng 6y ago
    We don't live in 10,000 sq ft, that's just what my new neighbors are building. A lot of it came down to cost. Right now we're in a large home on a large lot in the woods up in the mountains. For the same money I could have been closer to my office in a home half the size with no yard. Some of this dilemma was caused by anomalies in the market at the time we were shopping. People in suburban areas were listing their houses for FAR above market and no one was buying, the stalemate lasted a while and pushed us rural.
    - teekert 6y ago
      This is what is happening here in the Netherlands. 10 years ago we wanted a house in a specific neighborhood and it was just out of reach financially. Now I make twice as much and it is still out of reach. We are also considering going more rural, prices are just insane now in and around the cities. But we have hardly any building going on, when a house hits the market sometimes 20-40 couples line up and they make one offer blindly, usually well above what the sellers asked for. It's pretty frustrating, soon started will no longer be able to find a house.
justinzollars 6y ago
> interest rates are very low I don't see how interest rates can ever go higher. We have been trapped near zero since 2008.
- cbanek 6y ago
  Well there's interest rates from the Fed, and then there's mortgage rates. Since there's a higher default risk from mortgages than government debt, I think housing interest rates could rise again, they are at historic lows right now, although the fed funds rate as you say has been trapped near zero. While the mortgage rate is usually tied in with the value of the 10 year bond, it seemingly has done interesting things recently now that the 10 year bond is so low that a bank wouldn't cover it's default risk with that rate.
baron816 6y ago
Companies going public in droves. Surges in housing construction. What kind of economy is this? The Fed may find itself needing to raise interest rates before the end of the year.
- dicomdan 6y ago
  US is reaching herd immunity so the markets are reacting. Plus, trillions in stimulus spending.
  - totetsu 6y ago
    Did you see the man in HK who got infected again with a different strain? Herd immunity will not come
    - nostrebored 6y ago
      Who was asymptomatic and previously did not have igg antibodies but had an _expected_ immune response? This is how the immune system works! Stop sensationalizing this story.
      - nickthemagicman 6y ago
        Thank you for this. People just look for reasons to be afraid.
    - eikenberry 6y ago
      Posting some news worthy claim on the internet without a link to an article or a story... why even bother.
      - totetsu 6y ago
        https://news.rthk.hk/rthk/en/component/k2/1545589-20200824.htm https://news.rthk.hk/rthk/en/component/k2/1545589-20200824.h... https://news.ycombinator.com/item?id=24260152 https://news.ycombinator.com/item?id=24260152
crack-the-code 6y ago
What really makes me concerned is what the after effects are going to look like. What happens to housing prices after this is all over? When people realize their impulsive buys were a mistake. When foreclosures and evictions sweep the country. We are in this strange period where people are not yet feeling the extent of the potential economic impact, and I fear for what will happen in two or three years.
- aaomidi 6y ago
  I'll finally afford to buy a house
  - tonyedgecombe 6y ago
    If you've still got a job.
- ramraj07 6y ago
  Why is it an absolute given that the economy is definitely going to flop? As the days pass I'm convinced more and more that the general economy (and the 1 or 2% of people who are directly benefited by it) will do just fine, even though the majority of the population is jobless and moneyless. This will finally lay bare that the contribution from the majority of the working population is quite optional for the GDP or any measure of economic productivity, and push comes to shove, the institutions (factories, offices) will start realising they can maintain or even increase productivity without involving the majority of the population in the process. Hence the people who have the money now (and are hence in positions that don't necessarily get lost in this process) are likely to continue prospering, while the people who are losing jobs and houses are never going to get them replaced.
  - cheschire 6y ago
    I've been thinking along those same lines. Basically feels like we're returning to a form of feudalism, with a rather established aristocracy and nobility already in place. I'm just waiting for the financially ailing counties to start selling themselves in their totality to corporations and those corporations begin providing employment in exchange for literal cradle-to-grave services.
jb775 6y ago
Millennials are over the inner-city lifestyle and are sick of paying rents higher than mortgage payments. Seeing their cities destroyed and become more dangerous over the past few months was the straw that broke the camels back. I predict most large cities will get worse over the next 10 years as businesses follow the millennials to the suburbs.
- shahbaby 6y ago
  Why is this downvoted? I'm guessing it's "that's not my experience so it must be wrong."
  - SpicyLemonZest 6y ago
    The source article is about a month-over-month increase in home construction. Speculation about how much millennials hate the "inner-city lifestyle" or how bad cities will get over the next decade seems both inflammatory and off topic.
- theduder99 6y ago
  correct, the only reason people live near major urban centers is jobs. everything else about those areas is terrible for families, taxes, quality of life, space, traffic, schools, pollution, etc..I could go on forever. Now that WFH culture has taken over, there is no reason to live in a big city. young kids straight out of high school/college may still start out in a big city but once it is time to start a family they'll move out.
- zeku 6y ago
  Sure I can see this, another thing is that cities suck in America. Just take a vacation to Europe and just wake up and go get a coffee and live your life getting around the city. Take the bus there and then come back to almost all major US metros and try to take the bus. European cities also feel much much safer, probably because the bottom 10% of their population in terms of income have simple access to some kind of safety net. We only have a small handful of cities in the country that can even compare to this on any level. That's why young people would leave cities, because the cities aren't built for living in.
drawkbox 6y ago
A bit misleading. New Privately Owned Housing Units Started have merely bounced back to an already suppressed market from the Great Recession housing bubble crash which hit all-time lows. [1] Growth is good, return to baseline is good, but this was already a largely suppressed market. Housing supply needs to improve much more than this to be a major indicator of growth. We are currently at 1982 and 1991 levels. New Privately Owned Housing Units starts are at all time lows historically on average, again largely from the Great Recession. Good news, but not some massive gain. [1] https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST
- wheelerwj 6y ago
  still, who the fuck is buying these houses?
  - JacKTrocinskI 6y ago
    Engineers and other well paid professionals.
  - chrisseaton 6y ago
    People who need somewhere to live? Not sure what you’re asking?
  - adventured 6y ago
    The vast majority of median and higher income earners have been untouched by the economic damage from the pandemic. Those are the prime home buyers and they still have their jobs and purchasing power intact. The Covid recession is not a normal recession and it's nothing like the great recession (which widely hit jobs in every economic tier). Now they're being handed record low mortgage rates, which is prompting the buying.
    - throwanem 6y ago
      > The vast majority of median and higher income earners have been untouched by the economic damage from the pandemic. So far.
jointpdf 6y ago
So this article doesn’t cite the original source, but I think it’s this (HUD and the Census Bureau are part of Commerce): https://www.census.gov/construction/nrc/pdf/newresconst.pdf https://www.census.gov/construction/nrc/pdf/newresconst.pdf This puts everything in much better context, especially the time series plot. It seems home starts / permits were already increasing from July 2019 - Dec 2019, matching the July 2020 levels. So the better question might be: why that surge?
spicyramen 6y ago
People staying at home more time, want to improve their current space, around my neighborhood people started rebuilding decks and doing remodeling. Local home depot traffic defienetly spiked
- Chilinot 6y ago
  Same in my country. There has been a surge of people at the hardware stores buying supplies to repair/improve their homes as a way to pass the time when you no longer can travel. I guess they put their travel money into home improvements.
learnstats2 6y ago
Does this headline have a third derivative? Completely misleading.
oxymoran 6y ago
But this doesn’t fit the official doom and gloom narrative. The housing market must be a giant casino like the stock market.
- vsareto 6y ago
  If they built houses like they built slot machines, 80% of the houses would be worth what people are actually paying for them
aazaa 6y ago
No mention of record-low interest rates on the 10Y and 30Y - held in place by a Fed terrified of erring on the downside. Officials swear it's not yield curve control, but of course it is. There's nothing magical going on. Housing purchases are made with debt. If you suppress the price of debt, you increase demand for houses. Read some of the articles written about the real estate boom prior to 2008. They also left out the minor detail of panicked policy makers juicing the money supply.
- jdhn 6y ago
  I don't see this changing no matter who wins the White House in November. I used to laugh at people who said that the Fed was going to work at lowering interest rates as much as possible in order to promote economic growth and inflate away the debt. I'm not laughing at those people anymore.
  - selectodude 6y ago
    We've unofficially crossed the rubicon into basically what amounts to Modern Monetary Theory. It's going to be an interesting decade.
    - eli_gottlieb 6y ago
      Nah, before it becomes real MMT we have to actually keep up the trend of taking the cheap money and spending it fiscally, not just giving out cheap loans. Right now we've got the HEROES Act stalled in the Senate and the CARES Act has largely run out, so we're back to Great Recession era "haha money printer go brrr".
      - cperciva 6y ago
        I'd go a step further and say that MMT is about borrowing for structural deficits. There's nothing MMT about Keynesian stimulus in 2008 or 2020; where things went off the rails was governments running large deficits during the boom years of 2015-2019 (when they should instead have been saving for 2020).
jungletime 6y ago
Will this make a place like Hawaii that relies on tourism more affordable or less?
code4tee 6y ago
We’re going to see a lot of mathematically correct but potentially misleading headlines as things start to tick back up during the recovery. If you tell the average person “X dropped by 50%.” And then next month “X surged by 50%” they’d think it dropped and is back to where it started, not that in reality “X surged by 50% actually means it’s still down by 25% from where it was.” A lot of this going on at the moment giving either intentional or unintentional impressions of what’s actually happening.
RickJWagner 6y ago
My wife and I started building a new house late last year. When covid hit early this year, I really worried about how the sale of our then-current home would go. Luckily, the local real estate market stayed strong. We sold the house about 30 days before we moved into the new place in July-- above asking price! It felt like a miracle. It felt like the last parts of the new house took forever. Appliances, lights, etc. took a long time to arrive. Window blinds took several months. (All this affected by covid, we are told.) I feel bad for people who have houses under construction now. I'm told the wait for materials is much worse (!)

159 points by apsec112 6y ago

marmshallow 6y ago

Hotel renovations are on the rise too, according to my landlords who are interior decorators.

just-juan-post 6y ago
Now is an excellent time to do them. Travel is down and overall inconvenience to guests is minimized (because there are fewer overall guests). Had they the logistics I was hoping they would do more road construction during March April May when traffic was almost non-existent.
- godot 6y ago
  It's a good point but back in March the coronavirus was less understood. We didn't know that they were less likely to spread outdoors. We didn't know if the virus was really airborne or not. We didn't know masks helped because they were commonly spread by droplets. (Ok, a lot of the world did, but America didn't.) If road constructions had to be done in groups (likely?) then it was putting construction workers in front of an unknown set of risks. I think we understand all those things a little better now so in retrospect it may have been a good idea.

hanniabu 6y ago

They didn't state any theories on why we're seeing an increase. Is it people spending their vacation money on their home since they can't go anywhere? Is it because they're working from home now and can't stand looking at that fix/upgrade they've been putting off forever? For those here doing work on your home, why now?

hoka 6y ago
Cheap labor maybe from desperate contractors/handy workers? Low rates?
JMTQp8lwXL 6y ago
It's up a large percent because it fell a large percent at the beginning of Covid. It's a non-story.
- samatman 6y ago
  Misleading, yes. Industries recovering to pre-pandemic levels is anything but a non-story. There's nothing inevitable about that happening right now. It's news.
colordrops 6y ago
My belief is that many renters who have the means to buy a house but have been putting it off have now decided to look for homes because they are stuck in their rental all day and can't do with it what they want. Also, many people are moving to other cities now that they can work remote, and a certain percentage of these people will purchase new homes. These cause a shortage of inventory, so the response is to build homes. Furthermore, interest rates are very low and there is a perception that this won't last, so people are scrambling to get a loan. I believe this because I am one of those people and I know several others in similar situations. I'm in escrow right now.
- cinquemb 6y ago
  This is true, I'm waiting to buy (cash, no mortgage) still, not enough owner bankruptcies yet for me. I can wait until things can no longer operate under "extend and pretend".
  - polotics 6y ago
    The market can stay irrational for much longer than you can stay solvent and/or alive.
    - cinquemb 6y ago
      I've been working remote for 5 years, and I live in ~90m2 apt in jakarta paying what i had to pay to live in a 3 bdr apt in boston with 2 other grown men… made enough long tail risk on HY trash, going into the "pandemic", and will make more again when the bottom falls out and load up on all the garbage for ~8.5 cents on the dollar (current amount of HY that is collateralized coming due within then next 4.5-5 years). I hope it goes on longer, more time to build up more leverage selling trash to folks who believe oft repeated things as if they were the word of god.
      - colordrops 6y ago
        I must admit I'm an engineer and not a financial person, and am having a hard time understanding this. Are these correct: long tail risk: assets that have problems that take a long time to affect the price HY: high yield, meaning they change quickly in price by large percentages and can make more money quickly trash: low priced stocks for crappy companies bottom falls out: market takes a dive garbage: same thing as trash collateralized HY coming due: investments backed by assets that will default leverage: money "oft repeated things": aphorisms about finance that are often wrong, in this case the poster you replied to's comment. I'm probably wrong on half of this and I still don't really get what you are saying. Excuse my ignorance.
bradlys 6y ago
I'm pretty sure it's in the first line of the article. > Construction of new U.S. homes surged 22.6% last month as homebuilders bounced back from a lull induced by the coronavirus pandemic. "bounced back" being the takeaway. It's just bouncing back to somewhat normal levels after it being down a lot.
alasdair_ 6y ago
It sounds like it’s a big deal, and it’s been all over the media, yet US housing starts are still below the levels seem in February 2020, so it’s more a return to normal than anything. https://tradingeconomics.com/united-states/housing-starts https://tradingeconomics.com/united-states/housing-starts That being said, lumber prices are up 50% for just six months ago.
- aaomidi 6y ago
  > That being said, lumber prices are up 50% for just six months ago. How much of this is because of wildfires causing disruptions?
  - foota 6y ago
    I don't think there's that much logging in california, is there? This site[1] has an outdated table. California was 6% of lumber production in 2015. 1: https://oregonforests.org/blog/oregon-number-one https://oregonforests.org/blog/oregon-number-one
    - nostrademons 6y ago
      The areas that are burning are not really large timber producers. The CZU fire is largely in protected state & county parks. The SCU and LNU fires are largely in ranch grassland & chaparral, frequently used for grazing cattle. Christmas season may be a bust though - a lot of the Christmas tree farms in the Bay Area are in areas threatened by the CZU fire. Most of the timber production in California comes from way up north, in the Eureka area and in the Sierra Nevadas. This area is somewhat resistant to fires since it gets so much more moisture and precipitation.
    - aaomidi 6y ago
      > I don't think there's that much logging in california, is there? No idea was just thinking out loud
  - maxerickson 6y ago
    Uncertainty is bad for the supply chain. Saw mills aren't sure they are going to buy logs and living trees are better than rotting logs and so on.
0DHm2CxO7Lb3 6y ago
My guess, people are moving away from the cities out to the suburbs because the great thing about the cities are all the social events, restaurants, and activities which are mostly shutdown and a lot of people don't need commute to work since they work remote now. So might as well move out from an apartment into a bigger house. Then there might also be a fear of higher crime, taxes, etc
- jupiter90000 6y ago
  This theory doesn't make a lot of sense to me, I've heard it a few times though. Why would someone buy a house away from the city during a temporary pandemic shutdown, assuming when things eventually open up again more in say max a year or two, they will need/want to be back in the city? I mean permanent remote work is one thing, I guess, but everything else that has 'gone away' hopefully will not be that way permanently (?)
  - adjkant 6y ago
    Not sure that I buy the theory either at the macro level, but I think one thing I have personally seen/heard of is people who are now realizing how much they don't like the city life (even when things are open) and the pandemic is the straw to break the camel's back here and convince them to go elsewhere to try something else. The key is that it's not temporary for them. Even the people that are there for work and already knew their city reality may also be realizing their gained happiness out of the city is worth more than the financial boost of their job in the city.
  - tal8d 6y ago
    I'll be very surprised if things get much better anytime soon, certainly not before the end of the year. Maybe two years from now... but I wouldn't bet on it. I live in a city where some questionable calls were made with regard to rioters, so I'm eager to put some distance between that and myself.
  - bluGill 6y ago
    Where you live is a compromise. With the city benifet gone but not the suburban ones the suburbs look attractive to people who are on the fence anyway.
jb775 6y ago
Rent prices are sky-high, there's social unrest in large cities, interest rates are crazy low, and many companies are now ok with remote working. It's a good time to invest in the suburbs if you can find a decent price.

ngngngng 6y ago

There are 10 homes being built within a quarter mile radius of me here in the mountains of Utah. These lots have stood empty for decades, with one or two homes going up per year. It makes no sense to me why they are all building now. Two of these homes are literally some of the largest homes I've ever seen in person. One is 10,000 sq ft, one is 20,000 sq ft. Unfortunately, with very few exceptions, they're all being built by retired "empty nesters". My wife and I are always hopeful that families with young kids will move in so they can be friends with our children. But wealthy rural communities are pretty inaccessible to young couples starting families. Funny, while so many in this community are discussing moving out into cheap rural areas, I'm longing for neighbors my age and friends for my kids and weighing moving to a city.

ponker 6y ago
I could have moved into a 10,000 square foot house in Utah but wouldn’t want to normalize that for my kids. Why not just a regular family suburb somewhere? You don’t have to go all the way to the city life to get neighbors with kids.
- ngngngng 6y ago
  We don't live in 10,000 sq ft, that's just what my new neighbors are building. A lot of it came down to cost. Right now we're in a large home on a large lot in the woods up in the mountains. For the same money I could have been closer to my office in a home half the size with no yard. Some of this dilemma was caused by anomalies in the market at the time we were shopping. People in suburban areas were listing their houses for FAR above market and no one was buying, the stalemate lasted a while and pushed us rural.
  - teekert 6y ago
    This is what is happening here in the Netherlands. 10 years ago we wanted a house in a specific neighborhood and it was just out of reach financially. Now I make twice as much and it is still out of reach. We are also considering going more rural, prices are just insane now in and around the cities. But we have hardly any building going on, when a house hits the market sometimes 20-40 couples line up and they make one offer blindly, usually well above what the sellers asked for. It's pretty frustrating, soon started will no longer be able to find a house.

justinzollars 6y ago

> interest rates are very low I don't see how interest rates can ever go higher. We have been trapped near zero since 2008.

cbanek 6y ago
Well there's interest rates from the Fed, and then there's mortgage rates. Since there's a higher default risk from mortgages than government debt, I think housing interest rates could rise again, they are at historic lows right now, although the fed funds rate as you say has been trapped near zero. While the mortgage rate is usually tied in with the value of the 10 year bond, it seemingly has done interesting things recently now that the 10 year bond is so low that a bank wouldn't cover it's default risk with that rate.

baron816 6y ago

Companies going public in droves. Surges in housing construction. What kind of economy is this? The Fed may find itself needing to raise interest rates before the end of the year.

dicomdan 6y ago
US is reaching herd immunity so the markets are reacting. Plus, trillions in stimulus spending.
- totetsu 6y ago
  Did you see the man in HK who got infected again with a different strain? Herd immunity will not come
  - nostrebored 6y ago
    Who was asymptomatic and previously did not have igg antibodies but had an _expected_ immune response? This is how the immune system works! Stop sensationalizing this story.
    - nickthemagicman 6y ago
      Thank you for this. People just look for reasons to be afraid.
  - eikenberry 6y ago
    Posting some news worthy claim on the internet without a link to an article or a story... why even bother.
    - totetsu 6y ago
      https://news.rthk.hk/rthk/en/component/k2/1545589-20200824.htm https://news.rthk.hk/rthk/en/component/k2/1545589-20200824.h... https://news.ycombinator.com/item?id=24260152 https://news.ycombinator.com/item?id=24260152

crack-the-code 6y ago

What really makes me concerned is what the after effects are going to look like. What happens to housing prices after this is all over? When people realize their impulsive buys were a mistake. When foreclosures and evictions sweep the country. We are in this strange period where people are not yet feeling the extent of the potential economic impact, and I fear for what will happen in two or three years.

aaomidi 6y ago
I'll finally afford to buy a house
- tonyedgecombe 6y ago
  If you've still got a job.
ramraj07 6y ago
Why is it an absolute given that the economy is definitely going to flop? As the days pass I'm convinced more and more that the general economy (and the 1 or 2% of people who are directly benefited by it) will do just fine, even though the majority of the population is jobless and moneyless. This will finally lay bare that the contribution from the majority of the working population is quite optional for the GDP or any measure of economic productivity, and push comes to shove, the institutions (factories, offices) will start realising they can maintain or even increase productivity without involving the majority of the population in the process. Hence the people who have the money now (and are hence in positions that don't necessarily get lost in this process) are likely to continue prospering, while the people who are losing jobs and houses are never going to get them replaced.
- cheschire 6y ago
  I've been thinking along those same lines. Basically feels like we're returning to a form of feudalism, with a rather established aristocracy and nobility already in place. I'm just waiting for the financially ailing counties to start selling themselves in their totality to corporations and those corporations begin providing employment in exchange for literal cradle-to-grave services.

jb775 6y ago

Millennials are over the inner-city lifestyle and are sick of paying rents higher than mortgage payments. Seeing their cities destroyed and become more dangerous over the past few months was the straw that broke the camels back. I predict most large cities will get worse over the next 10 years as businesses follow the millennials to the suburbs.

shahbaby 6y ago
Why is this downvoted? I'm guessing it's "that's not my experience so it must be wrong."
- SpicyLemonZest 6y ago
  The source article is about a month-over-month increase in home construction. Speculation about how much millennials hate the "inner-city lifestyle" or how bad cities will get over the next decade seems both inflammatory and off topic.
theduder99 6y ago
correct, the only reason people live near major urban centers is jobs. everything else about those areas is terrible for families, taxes, quality of life, space, traffic, schools, pollution, etc..I could go on forever. Now that WFH culture has taken over, there is no reason to live in a big city. young kids straight out of high school/college may still start out in a big city but once it is time to start a family they'll move out.
zeku 6y ago
Sure I can see this, another thing is that cities suck in America. Just take a vacation to Europe and just wake up and go get a coffee and live your life getting around the city. Take the bus there and then come back to almost all major US metros and try to take the bus. European cities also feel much much safer, probably because the bottom 10% of their population in terms of income have simple access to some kind of safety net. We only have a small handful of cities in the country that can even compare to this on any level. That's why young people would leave cities, because the cities aren't built for living in.

drawkbox 6y ago

A bit misleading. New Privately Owned Housing Units Started have merely bounced back to an already suppressed market from the Great Recession housing bubble crash which hit all-time lows. [1] Growth is good, return to baseline is good, but this was already a largely suppressed market. Housing supply needs to improve much more than this to be a major indicator of growth. We are currently at 1982 and 1991 levels. New Privately Owned Housing Units starts are at all time lows historically on average, again largely from the Great Recession. Good news, but not some massive gain. [1] https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST

wheelerwj 6y ago
still, who the fuck is buying these houses?
- JacKTrocinskI 6y ago
  Engineers and other well paid professionals.
- chrisseaton 6y ago
  People who need somewhere to live? Not sure what you’re asking?
- adventured 6y ago
  The vast majority of median and higher income earners have been untouched by the economic damage from the pandemic. Those are the prime home buyers and they still have their jobs and purchasing power intact. The Covid recession is not a normal recession and it's nothing like the great recession (which widely hit jobs in every economic tier). Now they're being handed record low mortgage rates, which is prompting the buying.
  - throwanem 6y ago
    > The vast majority of median and higher income earners have been untouched by the economic damage from the pandemic. So far.

jointpdf 6y ago

So this article doesn’t cite the original source, but I think it’s this (HUD and the Census Bureau are part of Commerce): https://www.census.gov/construction/nrc/pdf/newresconst.pdf https://www.census.gov/construction/nrc/pdf/newresconst.pdf This puts everything in much better context, especially the time series plot. It seems home starts / permits were already increasing from July 2019 - Dec 2019, matching the July 2020 levels. So the better question might be: why that surge?

spicyramen 6y ago

People staying at home more time, want to improve their current space, around my neighborhood people started rebuilding decks and doing remodeling. Local home depot traffic defienetly spiked

Chilinot 6y ago
Same in my country. There has been a surge of people at the hardware stores buying supplies to repair/improve their homes as a way to pass the time when you no longer can travel. I guess they put their travel money into home improvements.

learnstats2 6y ago

Does this headline have a third derivative? Completely misleading.

oxymoran 6y ago

But this doesn’t fit the official doom and gloom narrative. The housing market must be a giant casino like the stock market.

vsareto 6y ago
If they built houses like they built slot machines, 80% of the houses would be worth what people are actually paying for them

aazaa 6y ago

No mention of record-low interest rates on the 10Y and 30Y - held in place by a Fed terrified of erring on the downside. Officials swear it's not yield curve control, but of course it is. There's nothing magical going on. Housing purchases are made with debt. If you suppress the price of debt, you increase demand for houses. Read some of the articles written about the real estate boom prior to 2008. They also left out the minor detail of panicked policy makers juicing the money supply.

jdhn 6y ago
I don't see this changing no matter who wins the White House in November. I used to laugh at people who said that the Fed was going to work at lowering interest rates as much as possible in order to promote economic growth and inflate away the debt. I'm not laughing at those people anymore.
- selectodude 6y ago
  We've unofficially crossed the rubicon into basically what amounts to Modern Monetary Theory. It's going to be an interesting decade.
  - eli_gottlieb 6y ago
    Nah, before it becomes real MMT we have to actually keep up the trend of taking the cheap money and spending it fiscally, not just giving out cheap loans. Right now we've got the HEROES Act stalled in the Senate and the CARES Act has largely run out, so we're back to Great Recession era "haha money printer go brrr".
    - cperciva 6y ago
      I'd go a step further and say that MMT is about borrowing for structural deficits. There's nothing MMT about Keynesian stimulus in 2008 or 2020; where things went off the rails was governments running large deficits during the boom years of 2015-2019 (when they should instead have been saving for 2020).

jungletime 6y ago

Will this make a place like Hawaii that relies on tourism more affordable or less?

code4tee 6y ago

We’re going to see a lot of mathematically correct but potentially misleading headlines as things start to tick back up during the recovery. If you tell the average person “X dropped by 50%.” And then next month “X surged by 50%” they’d think it dropped and is back to where it started, not that in reality “X surged by 50% actually means it’s still down by 25% from where it was.” A lot of this going on at the moment giving either intentional or unintentional impressions of what’s actually happening.

RickJWagner 6y ago

My wife and I started building a new house late last year. When covid hit early this year, I really worried about how the sale of our then-current home would go. Luckily, the local real estate market stayed strong. We sold the house about 30 days before we moved into the new place in July-- above asking price! It felt like a miracle. It felt like the last parts of the new house took forever. Appliances, lights, etc. took a long time to arrive. Window blinds took several months. (All this affected by covid, we are told.) I feel bad for people who have houses under construction now. I'm told the wait for materials is much worse (!)