Despite high home sales last month, if mortgage rates start to move higher, as the Federal Reserve suggests, the sale of new and used homes may slow, which could dampen the entire economy once again.
Although the unemployment rate inches down, and job creation is strong, many younger folks continue to live with their parents, or are renting, because income is not increasing enough for them to save for a down payment.
Building permits fell significantly last month, and states where energy exploration has been booming may see curtailed growth because the price of oil has fallen greatly. Credit Suisse says home construction may decline 20 percent in Texas; the Dallas Federal Reserve Bank states Texas employment may fall by 125,000 jobs. Two Texas-based energy companies have already announced job cuts of 16,000 total.
Credit Suisse imparted a sell rating on three homebuilders, all of whom have shares that have lost on the year–Pulte Homes, Meritage Homes and Ryland Group. Stay tuned. ##
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