Jan 23, 2019

The mixed views on a housing market rebound

Photo: Drew Angerer/Getty Images

December was a rough month for housing, writes the Wall Street Journal's Justin Lahart, referring to the 6.4% drop in existing home sales. Lahart says a January bounce may not happen.

One big quote: "While a bounce can’t be ruled out, the housing recovery’s best days probably are behind it," he writes.

The big picture: "The drop in home sales came despite a decline in mortgage rates."

  • Part of the problem was that the things that brought about the decline in rates — worries over the economy and tumbling stock prices — likely made would-be buyers nervous. And because it takes time to close on a house, the sales drop also probably reflected the higher rates in previous months.

The state of play: The shutdown is also likely to make things worse in coming months.

  • "There are about 800,000 federal employees who are either furloughed or working without pay as a result of the government shutdown. Buying a home can’t be top of mind for many of them."

On the other hand: Bank of America economist Michelle Meyer disagrees, writing in a note on Tuesday: "Don’t believe the narratives of a housing collapse."

  • Meyer argues that the challenges facing the housing sector “should only be a slight drag on growth” and notes, “the recent decline in mortgage rates is well timed, ahead of the spring selling season.”
  • "Sentiment among U.S. homebuilders rose last week for the first time in three months amid a decline in borrowing costs, even as home sales have slumped."
  • "We suspect that potential homebuyers who may have been scared from the market during the period of rising rates in the fall could see it as an opportunity to jump back in."

Go deeper: Home improvement retailers play down sluggish housing market

Go deeper

Situational awareness

Photo: Brett Carlsen/Getty Images

Catch up on today's biggest news:

  1. Mike Bloomberg offers to release women from 3 NDAs
  2. Wells Fargo to pay $3 billion to settle consumer abuse charges
  3. Bloomberg campaign says Tennessee vandalism "echoes language" from Bernie supporters
  4. Scoop: New White House personnel chief tells Cabinet liaisons to target Never Trumpers
  5. Nearly half of Republicans support pardoning Roger Stone

Wells Fargo agrees to pay $3 billion to settle consumer abuse charges

Clients use an ATM at a Wells Fargo Bank in Los Angeles, Calif. Photo: Ronen Tivony/SOPA Images/LightRocket via Getty Images

Wells Fargo agreed to a pay a combined $3 billion to the Justice Department and the Securities and Exchange Commission on Friday for opening millions of fake customer accounts between 2002 and 2016, the SEC said in a press release.

The big picture: The fine "is among the largest corporate penalties reached during the Trump administration," the Washington Post reports.

Bloomberg offers to release women from 3 nondisclosure agreements

Mike Bloomberg. Photo: Brett Carlsen/Getty Images

Mike Bloomberg said Friday his company will release women identified to have signed three nondisclosure agreements so they can publicly discuss their allegations against him if they wish.

Why it matters, via Axios' Margaret Talev: Bloomberg’s shift in policy toward NDAs comes as he tries to stanch his loss of female support after the Las Vegas debate. It is an effort to separate the total number of harassment and culture complaints at the large company from those directed at him personally. That could reframe the criticism against him, but also protect the company from legal fallout if all past NDAs were placed in jeopardy.