Fresh lobster rolls and a hotel for its workers? While some companies are laying folks off or ‘exfoliating the workers they don’t need’ (Minnesota Staffing Firm) resorts towns can’t find enough workers or housing for them. In Cape Cod there is incredible demand during the tourist season. Mac’s shack, known for their lobster rolls, took the dramatic step of purchasing a motel to house their seasonal workers who live in Cape Cod for 6 months during the tourist season.
Mortgage Rates increased this week in response to banks selling off bonds (increasing supply and lowering the price of Mortgage Backed Securities) as well as debt-ceiling fears. If the debt ceiling is raised the Treasury will issue more bonds and create additional supply in the market. Rates are up approximately 1.375% from this time last year.
Home Sales – NAR released their Existing-Home Sales Report which showed that sales declined 3.4% in April to a 4.28M annualized pace. Year over year sales are down 23% as inventory remains extremely low. If homes were to continue selling at the current pace with no new existing listing, supply would be exhausted in 2.9 months (4.6m is considered normal). Homes are on the market for an average of 22 days with 73% of homes selling in less than 30 days. First Time Home Buyers made up 29% of sales while cash buyers make up 28% of buyers. This means that of homes being purchased with a mortgage FTHB make up approximately 40% of the market. Investors are still buying homes as well taking 17% of market share.
New Construction – housing starts rose in April by 2% to a 1.4M unit annualized pace. Starts are down 22% year over year. Single-Family starts, which we are most interested in, rose 1.6% last month to a 846K pace. SF starts are down 28% year over year showing that supply will continue to be tight moving forward.
Freight – the April Cass Freight index fell 1.3% and is down 2.4% year over year. Costs of shipments fell 4% last month and 12% year over year. The decline in fuel prices is causing deflationary pressure on shipping prices.
Single Family Rents – the Core Logic Single Family Rent Growth Index showed that SF rents increased 4.3% between March 2022 and March 2023 – a decline from the previous month’s reading of 5% This is the 11th consecutive month of deceleration from the peak of 14% year over year increase. This should help with inflation reports.
Mortgage Applications to purchase homes declined 4.8% last week and are down 26% year over year. Refinances declined 7.7% last week and are down 43% year over year.