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.