The Real Estate News Brief: GDP Rise Expected, Rent Growth Speeds Up, Demand for Off-the-Grid Homes


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In this Real Estate News Brief for the week ending May 29th, 2021... what the GDP is expected to do in the second quarter, how much single-family rents have shot up, and what developers are saying about off-the-grid homes.

Economic News

We begin with economic news from this past week. The latest update on the GDP shows the first quarter holding at 6.4%. Economists had expected a revision to 6.6% but stronger imports apparently offset an increase in consumer spending. (1) Looking ahead to the second quarter, economists are expecting an annualized growth rate of 8.2%. And JP Morgan Chase CEO, Jamie Dimon, thinks we’ll continue to see this kind of growth for the next few years.

Inflation hit a 13-year high in April. According to the PCE index, it jumped to 3.6%. (2) That’s the strongest reading of the personal consumption expenditure index since 2008. It’s also well above the Federal Reserve’s 2% goal.

Great news on the job market. The government reports just 408,000 new unemployment claims for last week. (3) That’s the lowest number we’ve seen since the pandemic began. The biggest declines in new claims happened in the states of Washington, Florida, New Jersey, Texas, and Ohio. Oklahoma was the only state with a big increase.

Both new home sales and pending home sales for existing homes were down in April. The Census Bureau says new home sales fell 6% on a seasonally-adjusted annual basis. (4) The National Association of Realtors reports that pending home sales were down 4.4%. (5) Both are much higher than they were in April of 2020 however, but the pullback likely reflects higher prices and inventory issues.

Prices have been soaring across the country. The latest S&P CoreLogic Case-Shiller 20-city home price index shows a 1.6% increase from February to March. (6) On an annualized basis, prices are up 13.3%. Phoenix, San Diego, and Seattle prices have been rising the fastest. Phoenix prices are up 20% while the other two cities are close to that.

Consumers are apparently worried about inflation. Consumer confidence dipped slightly in May. It’s the first time in six months that the Conference Board reported a down month. (7) The University of Michigan had similar results for its consumer sentiment index. (8) Both reports say consumers are feeling less secure about the economy because they are paying higher prices for almost everything.

Mortgage Rates

Mortgage rates are still below 3% for a second week in a row. Freddie Mac says the 30-year fixed-rate mortgage was down 5 basis points to 2.95%. The 15-year was down 2 points to 2.27%. (9)

In other news making headlines…

Lenders Speeding Up Days to Close

Lenders are shortening the time it takes to close after a pandemic rush on loan applications that increased their workload. A report from ICE Mortgage Technology shows that the average number of days to close on a purchase was just 51 days in April. (10) For refinancing, it was 53 days. A year ago, it took 42 days for a purchase and 39 days to refinance.

ICE president, Joe Tyrrell, says that lenders are able to get the job done more quickly because of digital mortgage technologies.

Lenders Ready to Resume Foreclosures

Lenders are preparing for the end of the foreclosure moratorium. It’s set to expire on June 30th, and says that some lenders are planning to move forward with foreclosures, but some banks plan to hold back. (11)

Bank of America says that most clients are now current and it plans to work with the remaining few who need help. JP Morgan also says that about 90% of the people seeking forbearance have now exited those programs.

Wells Fargo recently said that it plans to extend the moratorium on its loans until the end of the year. That’s in line with a proposed rule by the Consumer Financial Protection Bureau which would prevent foreclosures from happening until 2022.

Rent Growth is Picking Up Speed

Rent growth has been picking up speed. CoreLogic says that single-family rents were up 4.3% in March compared to a year ago. Back then, the year-over-year increase was 3%. Rents are rising faster because demand is so strong for single-family rentals.

They are also rising much faster than apartment rents. According to Real Page, apartment rents were up 1.3% year-over-year.

Demand Grows for Off-Grid Homes

Demand is growing for off-the-grid homes, as climate change and natural disasters result in more and more power failures. CNBC reports that major blackout events are up about 60% from 2015. These have been caused by hurricanes along the Atlantic coast, a freak ice storm in Texas, a horrendous number of wildfires in California, and other events. That includes rolling blackouts that have become somewhat common on very hot days.

Grid shutdown in the midst of wildfires inspired one California developer to produce self-powered homes. Dvele homes have solar, battery back-ups, better insulation, and smart technology that use much less energy, and can operate without the grid, if there’s an emergency.

Off-the-grid living isn’t just for remote extremists anymore. The CEO of home improvement website Rise, Matthew Daigle, says: “I think you’re going to see more and more people looking for ways in which they can protect themselves as there are increased risks from storms, more utility disruptions, and more need for resiliency.”

You’ll find links to all these stories in the show notes at

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