Here’s Why Home Prices Are Climbing So Quickly

Want to buy a home but finding slim pickings? Blame the builders.
New home construction has not kept pace with the improving job market in recent years and is part of the reason that housing inventory is so scarce and home prices are growing so quickly, according to a report released today by the National Association of Realtors.
After over-building leading up to the housing bubble, developer laid off workers and scaled back construction by more than 75 percent. After the crash many of those workers migrated to other industries, making it harder for builders to quickly ramp up work. There are also fewer builders now than there were a decade ago, with many going bust in the bubble and others consolidating with competitors.
Related: How a Smart Home Can Save You Time and Money
While home starts have come back since the recession, the new NAR report finds that in two-thirds of markets homebuilding activity has not kept pace with the number of newly employed workers. In particular, construction of single-family homes remains at less than half its prerecession levels.
Many of the markets with the largest disparity of jobs versus home construction were hit hardest by the housing crisis but have fully rebounded, including San Jose, San Francisco, San Diego and Miami. New York is also among the top cities where home building has not kept pace.
There are several reasons that new home construction has grown so slowly in recent years, including rising construction and labor costs and tight credit. Despite those headwinds, new home construction is expected to grow by more than 25 percent this year.
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It’s Official: No Government Shutdown – for Now

President Trump signed a short-term continuing resolution today to fund the federal government through Friday, December 22.
Bloomberg called the maneuver “a monumental piece of can kicking,” which is no doubt the case, but at least you’ll be able to visit your favorite national park over the weekend.
Here's to small victories!
Greenspan Has a Warning About the GOP Tax Plan

The Republican tax cuts won’t do much for economic growth, former Federal Reserve Chair Alan Greenspan told CNBC Wednesday, but they will damage the country’s fiscal situation while creating the threat of stagflation. "This is a terrible fiscal situation we've got ourselves into," Greenspan said. "The administration is doing tax cuts and a spending decrease, but he's doing them in the wrong order. What we need right now is to focus totally on reducing the debt."
The US Economy Hits a Sweet Spot

“The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year,” The Wall Street Journal reports. But the milestone was reached, in part, because the Congressional Budget Office has, over the last 10 years, downgraded its estimate of the economy’s potential output. “Some economists think more slack remains in the job market than October’s 4.1% unemployment rate would suggest. Also, economic output is still well below its potential level based on estimates produced a decade ago by the CBO.”
The New York Times Drums Up Opposition to the Tax Bill

The New York Times editorial board took to Twitter Wednesday “to urge the Senate to reject a tax bill that hurts the middle class & the nation's fiscal health.”
Using the hashtag #thetaxbillshurts, the NYT Opinion account posted phone numbers for Sens. Susan Collins, Bob Corker, Jeff Flake, James Lankford, John McCain, Lisa Murkowski and Jerry Moran. It urged readers to call the senators and encourage them to oppose the bill.
In an editorial published Tuesday night, the Times wrote that “Republican senators have a choice. They can follow the will of their donors and vote to take money from the middle class and give it to the wealthiest people in the world. Or they can vote no, to protect the public and the financial health of the government.”
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Can Trump Succeed Where Mnuchin and Cohn Have Flopped?

President Trump met with members of the Senate Finance Committee Monday and is scheduled to attend Senate Republicans’ weekly policy lunch and make a personal push for the tax plan on Tuesday. Will he be a more effective salesman than surrogates in his administration?
Politico’s Annie Karni and Eliana Johnson report that both Democrats and Republicans say Mnuchin and chief economic adviser Gary Cohn have repeatedly botched their tax pitches, “in part due to their own backgrounds” as wealthy Goldman Sachs alums. “House Speaker Paul Ryan earlier this month asked the White House not to send Mnuchin to the Hill to talk with Republican lawmakers about the bill, according to two people familiar with the discussions — though Ryan has praised the Treasury secretary’s ability to improve the legislation itself,” Karni and Johnson write.