With the completion of our La Segarra community website, this Spanish-inspired community in Waller County, Texas is ready for home sales. Partnering with three builders, Cyrene Homes, Smith Douglas Homes, and Tricoast Homes, Bold Fox Development looks forward to helping Americans achieve their dreams of homeownerhip.
Texas is on track to surpass California as the most populous state by 2045, driven by job growth, affordable housing, and a different climate according to realtor.com. Why does this matter? Texas's booming economy and housing market are attracting people from California and abroad, reshaping the state's demographics and job mix. However, despite building more homes, Texas still faces affordability challenges with only 16% of housing inventory affordable to those earning under $75,000. We believe Texas is by far the best place in the country to open a business or raise a family, and major investments in road infrastructure in suburban ring counties and continued investment in load generation will keep us #1.
Consumer sentiment surveys reveal a sharp increase in inflation expectations, with figures showing a significant uptick over the past month, according to the University of Michigan. This surge indicates growing consumer concerns about future economic stability and purchasing power, suggesting consumers are bracing for continued price increases, which could influence spending behavior. What's next? Spiking inflation expectations, strong job growth, and a flurry of activity from the oval office will affect key parts of the economy. A wait and see approach seems the tact from the Fed. Recall our dim view that the Fed would be cutting rates anytime soon in Foxhole's January edition? Information like spiking inflation concerns among consumers will all but seal the prediction that the Fed will sit on the sidelines for the near future and developers and builders need to continue to expect higher costs of borrowing to be the new “normal”. Learn more.
The intersection of climate change and real estate is evident as insurance premiums soar. Why does it matter? The evolving risk landscape necessitates strategic recalibration for developers, builders, and homebuyers. Elevated insurance costs are compressing margins and reshaping home loan calculations. But real estate agents and mortgage brokers on the coast say the early signs are there - Buyers are increasingly backing out of contracts because they can’t afford the cost of insurance and homes are sitting on the market for longer, and sellers are dropping list prices. Our belief at the end of ‘24 was that the hidden costs of homeownership were going to become a very visible deterrent. Reinsurers are reorienting their modeling to address the risk profiles across the country further increasing the hidden costs of homeownership. Learn more.
Tremendous essay in the Wall Street Journal on zoning and its long term cause of housing shortage. Originating in the early 20th century, zoning laws in the U.S. were first adopted to make it harder to build, particularly in California. Over time, zoning has evolved to allow private individuals significant power to challenge new developments, often stalling much-needed housing projects (see California). However, there are some cities (Houston) who decided not to steer into these crippling zoning policies. Bottom line? Housing in the US is at an inflection point - here is what we see next.
Federal Reserve Chairman Jerome Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs. Key Takeaways: (1) All key inputs are up (land, construction supplies, labor, insurance), (2) The Fed viewpoint is finance costs will “unwind” over the next few years, and (3) The Fed does not control 30-year mortgage rates. What dos that all mean for buyers? Here's the Foxhole take.
Intriguing proposal to stimulate housing from WaPo for areas in the Western section of the US. Federal lands are being put to use via permit for oil and gas exploration. Opening up federal lands would be a paradigm shift with only a one-time revenue event as opposed to recurring royalty revenues to the federal government. All levels of government need to put every option on the table to tackle the housing shortage. That being said opening up federal lands would only alleviate issues in the western half of the US; there are NO federal lands East of the Mississippi. Learn more.
Strong reporting from the WSJ about inventory shifts on the market today and the near future. A few takaways: (1) December delistings surge with nearly 73,000 homes delisted, indicating a significant market dysfunction. This spike represents a 64% increase from the previous year, (2) Despite an increase in available homes, the supply remains constrained due to homeowners holding onto low mortgage rates, and (3) The rising delistings suggest a "shadow inventory" waiting to enter the market, which could pressure prices if volumes increase. Foxhole thoughts here.
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