One of the many great things about our old neighborhood in New Columbia (North Portland) was the well-designed rain gardens that helped manage runoff. Even though combining gray and green infrastructure can be as much as twice as cost effective as using only gray infrastructure it is typically overlooked in budgets because of politics and maintenance costs. The recent infrastructure package called for only 10% of funding to be spent on green infrastructure or water efficiency projects while the previous infrastructure package in 2009 called for 20%. As climate continues to change green investments will continue to be more valuable.
Mortgage Rates- increased again this week as inflation continues to rise. Rates are up approximately 2% from this time last year and are near a 10-year high.
Jobs- the number of people filing for unemployment for the first time decreased slightly to 184,000 – near historic lows. The number of people filing for continuing claims decreased to 1.4M (during the pandemic this was over 20m) which is the lowest number since 1970. The labor market remains extremely tight.
Home Sales – declined 2.7% in March and are down 4.5% from this time last year. Inventory increased to 950,00 at the end of March which supports 2 months of supply. Median price is up to $375,300 – a 15% increase from this time last year.
New Construction starts are up nearly 4% year over year but single family starts are down nearly 4.4%. Permits to build are up 6.7% but single family permits are down 3.9%. Construction of single family homes remains tight in spite of demand. This points to continued lack of supply and strong support for single family home prices.
Fed chair Jerome Powell spoke on Thursday stating that aggresive rates hikes to curb inflation are possible as soon as May. He suggested a 0.50% rate hike. The last time the Fed hiked by 0.50% was in the year 2000 and an 8-month recession followed in less than a year.
Mortgage Applications to purchase homes decreased 3% last week and are down 14% year over year. When taking into account the increase of cash buyers purchase activity is down closer to 7%. Refinances declined by 8% and are down 68% year over year.