Millennials Differ in Housing Preferences, But Not by Much

With the huge Millennial generation finally buying houses, the National Association of Home Builders has taken a deep dive into their various preferences for where and how they are going to live.  Last year it conducted the fourth in a series of buyer preference surveys, adding to data collected in 2007, 2012, and 2015.  A report by Paul Emrath analyzes those choices, how they differ across age groups and changed as those groups have aged. Some of the survey's findings specific to Millennials, which they define as those currently 23 to 39 years of age, is that they prefer to buy new homes built for sale rather than those that are custom built and, while most prefer to buy in the suburbs there is an increasing desire to live in central cities.

Junes New Home Sales Revision Was a Post-Crisis Record

The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes fell 12.8 percent in July to a seasonally adjusted annual rate of 635,000 units.  Forecasts pinned that number at 645k.  While missing the mark by 10,000 units and a 12.8 percent drop sound fairly significant, context is hugely important in this case. 

The 635k number constitutes a 4.3 percent improvement from the same month last year.   But this data is prone to heavy revisions, and that's where the story gets better for the housing market this month.  July's 635k may or may not be revised.  What we do know is that June's number was revised in rather grand fashion--nearly 14 percent higher than the initial reading.  With that, June was 20.9%higher than May, and logged an annual pace of 728,000 units--the highest level since 2007. 

Treasury Report Sparks Rumors of Fannie/Freddie Liberation

Sources are telling Bloomberg that a report on the White House's plan to release Fannie Mae and Freddie Mac (the GSEs) from their 11-year long conservatorship has landed on the desks of several agencies and is also in the hands of Lawrence Kudlow, head of the National Economic Council.  Bloomberg staff say this is a sign the report is getting closer to being released publicly.

The two mortgage giants were placed in conservatorship with the Federal Housing Finance Agency (FHFA) in August 2008 after they incurred large losses through mortgage defaults during the housing crisis. Over the next four years they each drew substantial operating funds from the Treasury, but both returned to profitability in 2013 and have earned billions of dollars since.  All of their profits except for a relatively small buffer has been swept into the Treasury as dividends.  The companies have not been allowed to rebuild capital nor have the payments to Treasury reduced any of their massive debt.