A new flurry of homebuilding, a gloomy summer for homeowners in the U.K. and a bizarre diplomatic feud involving a squatter. Looking into the wild and wooly world of real estate, here are our Hits and Misses for this week.
Hit: If I Had a Hammer! This week saw a double dose of positive news on the housing front. Builder confidence transitioned into positive territory for the first time in 11 months – the latest National Association of Home Builders (NAHB) / Wells Fargo (NYSE:WFC) Housing Market Index (HMI) for single-family homes rose five points in June to 55, marking both the sixth straight month of increased builder confidence and the first time since last July when sentiment levels surpassed the midpoint of 50. And the federal government reported single‐family housing starts in May were at a rate of 997,000, a robust 18.5% increase above the revised April figure of 841,000, while privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1.63 million, a vibrant 21.7% spike above the revised April estimate of 1.34 million and 5.7% above the May 2022 rate of 1.54 million.
Miss: Sorry, We’re Not Selling. While new home construction is underway, existing home sales crashed 20.4% year-over-year, according to data from the National Association of Realtors (NAR). A total of 4.30 million completed sales took place last month – one year earlier, the total was 5.40 million. NAR Chief Economist Lawrence Yun acknowledged that “existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019.” And with mortgage rates still above 6% and a lack of inventory in many markets, many homeowners who would have otherwise sold their properties and moved on are staying put indefinitely.
Hit: That’s Amore! Not every American is looking for a new home in his or her native land. The expatriate research blog MyDolceCasa.com performed a data analysis of nearly 1,300 real estate terms that were searched by Americans on Google from April 2022 to April 2023 to determine the most popular overseas destinations for U.S. buyers. The top ranked country, according to the data analysis, was Italy, with a total of 794,150 searches over 12 months and average of 66,179 searches per month. Costa Rica, Mexico, Portugal and Jamaica rounded out the top five destinations for aspiring expats.
Miss: Grey Skies Over Britain. Mortgage borrowers in the U.K. began the week with a new degree of financial discomfort as the average two-year fixed mortgage rates for homebuyers hit 6.01% today, the highest level since last December. But if borrowers were expecting government assistance, their hopes were dashed by Chancellor of the Exchequer Jeremy Hunt, who nixed the idea of having the government provide direct monetary support to households facing increased mortgage costs. Hunt stated such assistance would increase government borrowing and force the Bank of England to raise rates higher. Instead, Hunt insisted that banks work directly with borrowers who are facing financial difficulties.
Hit: Nyet, Mate! The weirdest diplomatic spat is taking place in the Australian capital of Canberra on the site of what was planned to be the new Russian Embassy. According to the Wall Street Journal, the Australian government terminated the plans for the new embassy complex, citing national security concerns. But one member of the Russian diplomatic mission ignored the memo and is squatting on the land that was supposed to have been vacated – the unnamed diplomatic staffer is occupying a white temporary cabin on the site, apparently daring his host country to evict him. Australian Prime Minister Anthony Albanese insisted the Russian squatter was not a threat, claiming, “The national security threat that was represented by a Russian embassy on-site are not the same as some bloke standing on a blade of grass on the site. That we don’t see really as a threat to our national security.”
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