… and Here’s The Week in Housing News

by Real estate financingMission+
7 minutes read

housing news
Hang on to your tweedy cap. Despite decent jobs data last week, we detect economic headwinds. Americans are dropping out of the workforce and no one knows whether the Greek drama is a tragedy or comedy of errors. The world has China and Puerto Rico to contend with, too. And Greece. GreeceGreeceGreece. This week, there’s more jobs data, Janet Yellen speaks and Congress will offer a taste of the looming fall spending battle. D.C. gets its own beach for the summer and it might be the only shark-free zone in town. Read on.

If it ain’t one thing….

Employers added 223,000 jobs last month, fewer workers are filing for unemployment and people are spending. That’s good. Unemployment fell to 5.3 percent. That’s bad.
Wait, what? Unemployment can fall when fewer people go looking for jobs and Americans are dropping out of the workforce in droves. The share of people working or looking for work fell to its lowest in 37 years. Sordid details here.
We also saw an unnerving drop in the number of residential construction workers on the job. Homebuilders already aren’t keeping pace with demand for houses and apartments and they’re having a hard time finding skilled workers.
Mortgage rates rose for the third straight week, clocking in at 4.08 percent, which brings us to this week’s important number ….

61 percent

That’s how many Greeks rejected an austerity program imposed by European creditors. No one’s sure what happens next, but unrest is growing and the world’s cash making a beeline for the safe haven of the U.S. For homeowners, the upshot is that mortgage interest rates might not rise as fast or as soon as people thought. We’ll get a better idea Wednesday, when the Fed releases details on its last meeting, and Friday, when Chair Janet Yellen gives a speech. If Fed policymakers get spooked, they’ll be more cautious with rate hikes.
Meanwhile, Greeks are draining their ATMs. German business magazine Handelsblatt summed it up nicely with this cover, which reads, “Give me the money or I’ll shoot.” Some kind souls are ponying up, but it won’t be enough. Greece might be a victim of strict German-style austerity measures, but drawing on an inside straight? It’s a losing hand. Now what?

It’s not just Greece

The U.S. has its own austerity woes. Remember sequestration? The 2011 law automatically cuts federal spending by about $100 billion a year across the board. It’s an irrational approach to budget cutting (the White House called it “mindless”) and never was supposed to happen, but until Democrats and Republicans start playing nice, we’re stuck with it.
So what? Congress is back from vacation and their main agenda will be prepping for another break in August, when the Republican presidential primary gets under way for real. But before they can catch their flights, lawmakers face a July 31 deadline to fund expiring housing and transportation projects.
Good luck with that. The Senate hasn’t passed a single spending bill this year and there’s growing likelihood of a showdown in September, when the fiscal year ends. Until then, Republicans will try to pass bills that adhere to that pesky austerity plan and President Obama will keep threatening vetoes.
Don’t forget, the U.S. Treasury hit its credit limit in March ($18.1 trillion) and has been living catch-as-catch-can to pay the bills. Fortunately, we have enough money coming in to keep the lights on for several more months. Oh, but Puerto Rico can’t pay its bills ($72 billion) and needs help declaring bankruptcy.
BTW, affordable housing will be a big topic of discussion. Senate appropriators last week signed off on $37.6 billion for the Department of Housing and Urban Development. Housers aren’t happy.


You still haven’t refinanced? Tsk. More than 6 million households could save on their mortgage if they did and another 450,000 could get a lower rate under the government’s HARP program. Refis could save more than 3 million homeowners at least $200 a month, according to Black Knight Financial Services. It’s not too late.

The American Dream 2016: RIP. Candidates mourn on the fourth of July, Politico reports.
Cuba is getting a U.S. embassy. The rest of us Americans can’t get our own piece of land there, but others are jumping in.
Bad guy roundup, yee-hah! Bank of America and Citigroup will pay $75 million to rehab affordable housing in New York. Mortgage servicers are cleaning up their act.
Fun with architecture: A real-life Jenga tower. Seriously, look.
Fun with Snarkitecture: D.C. gets a bubbly indoor beach at the National Building Museum. No sharks!

Photo by Noah Kalina, courtesy National Building Museum

Thoughts, ideas, want to vent? Lorraine.woellert@redfin.com
Get all Redfin news and analysis here.


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