Here’s Why Economists Are Worried About A New Housing Bubble
After posting their 39th consecutive month of year-over-year price gains, home prices in 33 states and the District of Columbia are at or within 10 percent of record highs, according to a report issued today by CoreLogic.
Home prices increased 6.3 percent year-over-year in May, and 1.7 percent month-over-month. Relatively low mortgage rates have helped fuel the price gains. In cities like San Francisco, where there is limited supply and high demand, prices are growing at a double-digit clip.
Prices are so high in certain areas that some economists are starting to worry about localized bubbles. The number of homes on the market is increasing slightly. Total housing inventory at the end of may reached 2.29 million houses, 1.8 percent more than this time last year, according to the National Association of Realtors. That’s a 5.1-month supply, giving sellers a slight edge in today’s market. (A six-month supply is considered a healthy market.)
Related: Get ready for Another Real Estate Bubble
South Carolina saw the biggest price gains, with homes showing annual appreciation of 10.3 percent. Other states showing big gains were Colorado (9.8 percent) and Washington (8.8 percent), CoreLogic reports.
High prices have also spurred builders to start constructing new single-family homes, sales of which increased 23 percent year-over-year in May.
While most states have seen price gains, five states (Massachusetts, Connecticut, Maryland, Mississippi, and Louisiana) saw local home prices fall in May.
CoreLogic economists expect prices to increase 5.1 percent year-over-year in June and 0.8 percent month to month.
GOP Tax Cuts Getting Less Popular, Poll Finds
Friday marked the six-month anniversary of President Trump’s signing the Republican tax overhaul into law, and public opinion of the law is moving in the wrong direction for the GOP. A Monmouth University survey conducted earlier this month found that 34 percent of the public approves of the tax reform passed by Republicans late last year, while 41 percent disapprove. Approval has fallen by 6 points since late April and disapproval has slipped 3 points. The percentage of people who aren’t sure how they feel about the plan has risen from 16 percent in April to 24 percent this month.
Other findings from the poll of 806 U.S. adults:
- 19 percent approve of the job Congress is doing; 67 percent disapprove
- 40 percent say the country is heading in the right direction, up from 33 percent in April
- Democrats hold a 7-point edge in a generic House ballot
Special Tax Break Zones Defined for All 50 States
The U.S. Treasury has approved the final group of opportunity zones, which offer tax incentives for investments made in low-income areas. The zones were created by the tax law signed in December.
Bill Lucia of Route Fifty has some details: “Treasury says that nearly 35 million people live in the designated zones and that census tracts in the zones have an average poverty rate of about 32 percent based on figures from 2011 to 2015, compared to a rate of 17 percent for the average U.S. census tract.”
Click here to explore the dynamic map of the zones on the U.S. Treasury website.
Map of the Day: Affordable Care Act Premiums Since 2014
Axios breaks down how monthly premiums on benchmark Affordable Care Act policies have risen state by state since 2014. The average increase: $481.
Obamacare Repeal Would Lead to 17.1 Million More Uninsured in 2019: Study
A new analysis by the Urban Institute finds that if the Affordable Care Act were eliminated entirely, the number of uninsured would rise by 17.1 million — or 50 percent — in 2019. The study also found that federal spending would be reduced by almost $147 billion next year if the ACA were fully repealed.
Your Tax Dollars at Work
Mick Mulvaney has been running the Consumer Financial Protection Bureau since last November, and by all accounts the South Carolina conservative is none too happy with the agency charged with protecting citizens from fraud in the financial industry. The Hill recently wrote up “five ways Mulvaney is cracking down on his own agency,” and they include dropping cases against payday lenders, dismissing three advisory boards and an effort to rebrand the operation as the Bureau of Consumer Financial Protection — a move critics say is intended to deemphasize the consumer part of the agency’s mission.
Mulvaney recently scored a small victory on the last point, changing the sign in the agency’s building to the new initials. “The Consumer Financial Protection Bureau does not exist,” Mulvaney told Congress in April, and now he’s proven the point, at least when it comes to the sign in his lobby (h/t to Vox and thanks to Alan Zibel of Public Citizen for the photo, via Twitter).
