Ali Wolf @AliWolfEcon Twitter profile

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Ali Wolf

11 months

We are in the "life happens" housing market, where marriage, divorce, death, downsizing, and family expansions are driving today's sales

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Ali Wolf

@AliWolfEcon

2 years

If someone could afford the monthly payment of a $450,000 home at a 3% interest rate, the equivalent payment at a 6% interest rate is for a $316,000 home.

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Ali Wolf

@AliWolfEcon

2 years

Builder in Austin said dominos are starting to fall. One builder dropped prices over $75K this week on homes with a base price below $700K

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Ali Wolf

@AliWolfEcon

2 years

Our data is now capturing a 70% cancellation rate in Phoenix...

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Ali Wolf

@AliWolfEcon

2 years

Called a loan officer this morning to ask about their current rates. He said they are quoting 4.75% for well qualified borrowers with 20% down.

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Ali Wolf

@AliWolfEcon

3 years

This stat is borderline unbelievable, but it's from the New York Fed, so I'll trust it. The share of mortgages going to borrowers in 2005 with a credit score of 760+ was 25%. The same number is 71% (!!!) for the second quarter of this year. #housing

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Ali Wolf

@AliWolfEcon

2 years

I know Brian Moynihan of BofA says this a lot but still worth repeating from a CNBC interview: BofA account holders who had an average balance of $1-2K before the pandemic, had an average of $4K in April. Those with $2-5K before the pandemic carry an average of $13K today.

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Ali Wolf

@AliWolfEcon

7 months

There’s a big builder offering a 4.2% FIXED rate mortgage today 🤯

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Ali Wolf

@AliWolfEcon

10 months

New homes are getting smaller

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Ali Wolf

@AliWolfEcon

8 months

My biggest takeaway from our multifamily conference so far: the rent vs own gap has never been wider in favor of rent

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Ali Wolf

@AliWolfEcon

2 years

I look at housing data constantly and yet this chart gets me every time

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Ali Wolf

@AliWolfEcon

2 years

Just talked to builder in California. They opened a new community over the weekend. 1,500 people toured the models. They only had <10 homes for sale.

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Ali Wolf

@AliWolfEcon

2 years

7% interest rates are crushing housing demand. This comment from our builder survey this week stood out: abysmal activity across all buyer types

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Ali Wolf

@AliWolfEcon

2 years

Longer cycle times + a rush to meet demand over the past year + more spec building = massive growth in new home units under construction

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Ali Wolf

@AliWolfEcon

3 years

I met with the White House today to talk about the current state of the housing market. We talked through drivers of home price appreciation, discussed constraints on building new homes quickly, and brainstormed potential policy fixes. #housing #affordablehousing

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Ali Wolf

@AliWolfEcon

2 years

Spoke to some builders that said the investor buyer pool has mostly dried up on higher mortgage rates.

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Ali Wolf

@AliWolfEcon

8 months

How are builders thinking about next year? Build, build, build

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Ali Wolf

@AliWolfEcon

11 months

Mortgage specialist at a big bank put a 70% probability on mortgage rates being 5.65% at the end of this year

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Ali Wolf

@AliWolfEcon

2 years

Move-up builder in the South was struggling with sales. Dropped prices by $100K and got 10 contracts almost right away. Price elasticity at work.

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Ali Wolf

@AliWolfEcon

2 years

Talked to a builder who targets markets where they can build $250,000 and under. I asked about sales. He said “Great, we are selling to so many to investors”

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Ali Wolf

@AliWolfEcon

1 year

This is one of the saddest new home charts

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Ali Wolf

@AliWolfEcon

3 years

Spent the day touring $1-1.4M homes in So Cal today and found myself saying “what a dump” in one after another. From plain dirty to rundown fixtures & windows. You can see why buyers are turning to builders, but even then we are hearing of people compromising given price levels

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Ali Wolf

@AliWolfEcon

1 year

It’s too soon to say (and still economic risks), but after seeing higher traffic in TX and FL and builder reported increases in CA, I wonder if some consumers have worked through the 5 stages of grief of higher mortgage rates

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Ali Wolf

@AliWolfEcon

2 years

If someone could afford the monthly payment for a $453,000 home at 3.0% (last year), the equivalent payment at 4.0% (earlier this year) is for a $400,000 home and the equivalent payment at 5.0% (today) is for a $356,000 home.

The Wall Street Journal

@WSJ

2 years

The average rate on 30-year mortgages hit 5% for the first time since 2011

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Ali Wolf

@AliWolfEcon

2 years

Something I heard yesterday from a builder that I haven’t heard in years: “We aren’t really experiencing a labor shortage anymore. With housing starts down, our trades are far less busy”

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Ali Wolf

@AliWolfEcon

3 years

Just got off a call on building supplies. The VP of Supply Chain mentioned that in Dallas, Amazon is advertising $22/hr with a $3,000 sign on bonus. He said this kind of competition is making it hard for suppliers to add new shifts, fill existing positions, & ramp up production

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Ali Wolf

@AliWolfEcon

3 years

I'm doing a presi next year & we just had a prep call. After talking a bit the gentleman paused &said "I don't normally do this but want to tell you you aren't charging enough. Your fee is $2K below your male counterparts. I'm all about pay equality &we'd like to pay you more"

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Ali Wolf

@AliWolfEcon

1 year

Seeing some mortgage rate buydowns from builders in the LOW 4%s

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Ali Wolf

@AliWolfEcon

2 years

Was just talking to a loan officer. He said he’s seeing a big increase in cash out refinances. Said people are giving up 2.8% interest rates for 4.5% bc they want the cash. Uses? Debt consolidation, remodeling, rainy day funds, and down payment for investment properties.

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Ali Wolf

@AliWolfEcon

2 years

Talked to a loan officer about rates: "Mortgage rates are definitely impacting buyers right now with little reprieve in sight. I’m having to get creative on the financing side to make things work" Prob fine but some PTSD hearing "creative" & "financing" in the same sentence

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Ali Wolf

@AliWolfEcon

2 years

There seems to be some 'consensus' that home prices will flatten rather than go negative. A former homebuilding CEO reminded people at our conference to be realistic; you don't have many examples of a MASSIVE runup in price followed by a flattening.

Lance Lambert

@NewsLambert

2 years

It's looking a lot like 2007 in Las Vegas and Phoenix

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Ali Wolf

@AliWolfEcon

2 years

Massive shift in our mid-month builder survey. More cancellations, more incentives, more mortgage qualification issues, and fewer builders intentionally capping sales

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Ali Wolf

@AliWolfEcon

3 years

Great news for when it finally hits homebuilders. Now we just need to solve: insulation, shingles, paint, appliances, windows, brick, garage doors, tubs, sinks, cabinets, AC units, nails, tile, shower doors, and circuit breakers.

Joe Weisenthal

@TheStalwart

3 years

Lumber just keeps cratering

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Ali Wolf

@AliWolfEcon

3 years

The #housing mkt gets crazier by the day. Here are the highlights from this morning’s call with our nationwide experts: A builder in the mountain region had to stop taking reservations because their interest list is TWO YEARS LONG; Builders in a TX mkt went back to buyers and...

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Ali Wolf

@AliWolfEcon

2 years

We had a pretty sobering call about the state of the housing market yesterday with our experts across the country. Price cuts & use of words like "evaporated" and phrases like "the faucet turned off." Not all bad though, esp. in the SE and for top-tier locations within a metro

The New York Times

@nytimes

2 years

Mortgage rates have spiked to their highest levels since the 2008 housing crisis as the Federal Reserve tries to fight inflation. "We've reached the point where people just can't afford a house," an executive at a real estate brokerage said.

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Ali Wolf

@AliWolfEcon

2 years

In Houston, the highest out of town interest for homes comes from the Los Angeles metro. The median new home selling price in Houston is ~$420,000. The like-for-like home in LA is $1.2M. Interest rate sensitivity is much less of a concern for those shoppers.

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Ali Wolf

@AliWolfEcon

2 years

Denver cancellations through 5/22

Ali Wolf

@AliWolfEcon

2 years

Denver new home contract cancellations rapidly increasing. Had a convo with a local division president last week who reiterated this sentiment. Data through 5/8.

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Ali Wolf

@AliWolfEcon

2 years

Our building products expert pulled satellite imagery from our database to track lumber inventory outside one of the largest producers.

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Ali Wolf

@AliWolfEcon

2 years

Just had a very interesting conversation with an employee at a homebuilding company. They reached out because they are trying to figure out how to gain new skills ahead of what they perceive as impending layoffs

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Ali Wolf

@AliWolfEcon

1 year

Just had a driver get me in Las Vegas and I asked him - “so what do you think about the housing market over the past few years.” He said “it’s been nuts. I sold my house for double and now I’m waiting for prices to drop.”

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Ali Wolf

@AliWolfEcon

8 months

From Zonda's September builder survey: "We operate in the luxury market, and our buyer pool has shrunk by at least 90% from 18 months ago."

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Ali Wolf

@AliWolfEcon

2 years

On a call with a bank and their team is calling for mortgage rates to be 4.25% by next year’s spring selling season. What do you think?

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Ali Wolf

@AliWolfEcon

2 years

I talked to a national builder today that said ~70% of the buyers in their backlog already have their rates locked

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Ali Wolf

@AliWolfEcon

2 years

The labor shortage in housing has never been more clear to me. We lost a pool of workers during GFC. It took 10+ years to mostly recover. Pandemic hit, massive layoffs. Then a quick ramp up in hiring. Layoffs are now hitting again. Rewarding industry with whiplash & uncertainty

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Ali Wolf

@AliWolfEcon

1 year

The majority of builders are saying it is too soon to tell how consumers are responding to rates moving from the 7%s to the 6%s, but this comment stood out to me: Significant increase in traffic over the weekend @conorsen

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Ali Wolf

@AliWolfEcon

1 month

1 in 3 (!) homes sold are bought by cash buyers, per Redfin

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Ali Wolf

@AliWolfEcon

2 years

Talked to a builder today about the labor shortage. She said the average age of a subcontractor is 55 years old

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Ali Wolf

@AliWolfEcon

2 years

Land prices have been sticky despite the slowing housing market. Hearing at our conference today, though, that in just the past 2-4 weeks, that has started to change with early signs of land prices starting to come down

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Ali Wolf

@AliWolfEcon

2 years

Hands down the biggest concern about the housing market in my conversations today: investors

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Ali Wolf

@AliWolfEcon

9 months

37% of new homes nationally are priced below $400K today. The share was nearly 60% in 2018.

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Ali Wolf

@AliWolfEcon

2 years

With 40% of builders reporting an increase in cancellations month-over-month, our follow up question was: can you still resell these homes at a higher price than the original contract? 46% said yes, 11% said no, and 43% said for the most part

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Ali Wolf

@AliWolfEcon

3 years

"The supply chain issues are now at epidemic level, wrecking havoc on our ability to close homes & make closing dates. The shortages are affecting almost every supplier, product, & subcontractor. The smallest item that can have oversized impact, such as concrete foundation ties"

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Ali Wolf

@AliWolfEcon

2 years

I had a builder tell me recently that baby boomer shoppers were more willing to walk from the deposits. They said some were walking from $40K, 50K, and even 80K deposits just because they’d rather lose that money than buy at what they perceived to be the wrong time

Tracey Ryniec

@TraceyRyniec

2 years

Pulte CC: Buyers are walking away from pretty sizable earnest money. They just aren't confident making a purchase. We haven't seen a noticeable change in the reasons why people are cancelling. Been consistent. $PHM

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Ali Wolf

@AliWolfEcon

2 years

NOT saying this is widespread but still interesting. Was at a conference & a loan officer told me that someone he worked with last year called & said they need to sell asap bc they bought based on the husband’s commission $. That’s way down & they can no longer afford the home

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Ali Wolf

@AliWolfEcon

1 year

Some markets were never able to really move the needle on bringing additional new housing supply to the market

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Ali Wolf

@AliWolfEcon

1 year

Home from the International Builders Show. Here are my three takeaways: 1. The new home cancellation rate has largely normalized; 2. Sales in January crushed expectations; 3. Builders had cautious optimism with many mentions of a head fake

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Ali Wolf

@AliWolfEcon

1 year

We asked in our millennial survey: If money wasn't an object, where in the U.S. would you live? Preliminary results for top three: San Diego, New York City, and Denver

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Ali Wolf

@AliWolfEcon

1 year

Housing has been, and always will be, local

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Ali Wolf

@AliWolfEcon

2 years

At the beginning of this year, over 98% of builders classified the housing market as a sellers’ market. Today: 3% classify it as such, per Zonda data

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Ali Wolf

@AliWolfEcon

2 years

Only 3% of builders report any kind of layoffs in response to the slower market. 78% aren't planning for any layoffs either. The most common thing I've heard related to employment: not backfilling positions after an employee voluntarily leaves

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Ali Wolf

@AliWolfEcon

2 years

Denver new home contract cancellations rapidly increasing. Had a convo with a local division president last week who reiterated this sentiment. Data through 5/8.

Ali Wolf

@AliWolfEcon

2 years

We have weekly housing data in some markets. This is Denver. Cancellations increasing but for now, just approaching pre-COVID trends

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Ali Wolf

@AliWolfEcon

8 months

Mortgage rate buydowns seal the deal in the new home market

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Ali Wolf

@AliWolfEcon

3 years

Supply chain whack a mole continues. Builder text this morning: "now we can't install countertops because the silicon glue that sticks them down is out of supply"

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Ali Wolf

@AliWolfEcon

2 years

My coworker visited 20 new home communities in #Phoenix . This comment stood out to me: Interest rates are a factor but consumer confidence is more powerful. People asking: Am I buying at the top? Will I be employed 6 to 12 months from now? What happens if there is a recession?

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Ali Wolf

@AliWolfEcon

3 years

Cedar Point, a theme park near my hometown in Ohio, DOUBLED the seasonal and part-time wages compared to last year and STILL needs to limit the days they are open in June because they can’t find enough staff. Crazy #economy #laborshortage

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Ali Wolf

@AliWolfEcon

2 years

The average mortgage payment for a home year-to-date has risen 17% based on interest rates alone

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Ali Wolf

@AliWolfEcon

2 years

Coworker that is doing fieldwork this week just called. Said on the ground, there’s a market in the West where home prices are already down 10-15%

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Ali Wolf

@AliWolfEcon

5 months

80% of builders plan to start more homes in '24 vs this year

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Ali Wolf

@AliWolfEcon

2 years

We had 80% of builders in our monthly survey report supply chain disruptions, the lowest read in over 18 months.

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Ali Wolf

@AliWolfEcon

1 year

Select boomers and millennials are looking for the same home but the former is often coming to the market equity rich and less price/rate sensitive than the latter. This has allowed boomers to overtake millennials as the top buyers in 2022

Joe Weisenthal

@TheStalwart

1 year

This was an absolutely mindblowing point from @AliWolfEcon I hadn't thought about before. Lots of people talk about how the housing market will get looser as Boomers age/die. But what if they're making the hottest housing markets even worse right now?

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Ali Wolf

@AliWolfEcon

2 years

Now is the time to start watching cancellations in the new home market. Most buyers have undergone mortgage rate sensitivity on the underwriting side. How do the consumers feel about the higher monthly payment though? Will depend on their other options and income

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Ali Wolf

@AliWolfEcon

2 years

Visited a few open houses in So Cal yesterday. Very sleepy. Suspect the homes will still sell within a few weeks but huge difference compared to 6 months ago

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Ali Wolf

@AliWolfEcon

11 months

Want another reason for the relative strength in the new home market? New home prices averaged a 27% premium above resale prices since 2010. Today the spread is just 4% (!)

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Ali Wolf

@AliWolfEcon

2 years

New home

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Ali Wolf

@AliWolfEcon

2 years

Meeting with a board of a lumber company in a fitting location in Oregon

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Ali Wolf

@AliWolfEcon

3 years

I'm meeting with the White House every month for the rest of the year to continue our discussion on the housing market. Is there anything you feel is misunderstood or needs to be brought up on the state of #housing ?

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Ali Wolf

@AliWolfEcon

7 months

Had a gentleman tell me today he believes the federal funds rate goes to high-6%/low-7% and the Fed holds there for a couple of years. What do you think?

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Ali Wolf

@AliWolfEcon

2 years

I had a call with a builder CEO today and asked if they had any sensitivity to me saying our forecast includes 5-10% national price drop. They said "no, and I don't think that's dramatically different to what we are seeing on the ground today anyways"

Lance Lambert

@NewsLambert

2 years

Historically speaking, "5% to 10%" U.S. home price corrections are rare. Very rare.

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Ali Wolf

@AliWolfEcon

2 years

I am NOT saying this is happening everywhere, but just got off the phone with a builder where he mentioned more than once "people are stretching as much as they possibly can to buy a home today." This wasn't happening a few months ago.

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Ali Wolf

@AliWolfEcon

2 years

5.7% for 30-year fixed this morning. 5.0% for adjustable rate.

Ali Wolf

@AliWolfEcon

2 years

5.25% this morning

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Ali Wolf

@AliWolfEcon

9 months

The typical monthly mortgage payment is now 73% above where it started at the beginning of last year

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Ali Wolf

@AliWolfEcon

2 years

Builder owned by a Japanese company where the latter has perfected manufactured housing in Japan - “Very low likelihood in my lifetime of more modular housing in the US”

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Ali Wolf

@AliWolfEcon

2 years

Talked to a cabinet supplier. Historical lead times: 6 weeks Today: 8 months

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Ali Wolf

@AliWolfEcon

2 years

Every month we've asked builders if they are experiencing supply chain disruptions. Big jump this month: August: 93% yes Sept: 91% Oct: 91% Nov: 90% January 2022: 100%

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Ali Wolf

@AliWolfEcon

2 years

Talked with a builder who has a bit of a buildup in inventory. Investor reached out and said they’d buy all of them for a 30% discount. Builder passed. Market is slower but not that slow.

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Ali Wolf

@AliWolfEcon

1 year

Builder: we used to say we could sell every home we wanted but couldn’t build them. Now we are saying we can’t sell homes and we can’t build them

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Ali Wolf

@AliWolfEcon

2 years

An interesting challenge in the housing market is figuring out what will compel those that have lived in their homes for 20+ years to sell and move.

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Ali Wolf

@AliWolfEcon

6 months

Who is buying today? Builder in So Cal said they have 70% foreign nationals (60% of which all cash) in select communities

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Ali Wolf

@AliWolfEcon

2 years

Nearly 25% of millennials in our survey said their down payment was funded by the bank of mom and dad. Was at a dinner the other night and two of the gentleman mentioned they did just that. One wants his money back on sale of the home. The other said it was simply a gift.

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Ali Wolf

@AliWolfEcon

2 years

We know 90% of builders were slowing sales in January, but a builder I talked to yesterday covering Florida said that they are going to halt taking ANY new contracts in one of their large markets through April in an attempt to let their crews catch up

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Ali Wolf

@AliWolfEcon

10 months

Roughly 40% of homebuilders using mortgage rate buydowns report 50%+ of their buyers are using them

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Ali Wolf

@AliWolfEcon

2 years

Ouch QMI= new home quick move-in inventory

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Ali Wolf

@AliWolfEcon

3 years

Lumber comments from builders: Lumber may be stabilizing but other materials&labor have gone up; We believe it will take 3-5 mons for the drop we read about to effect our current pricing & see a decrease on our invoices.; We will likely see some relief with the next lumber lock

Joe Weisenthal

@TheStalwart

3 years

Lumber just wiped out its 2021 gains.

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Ali Wolf

@AliWolfEcon

2 years

Just got off the phone with a builder who is looking to convert 15-30% of their housing stock to rental

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Ali Wolf

@AliWolfEcon

7 months

Builder re: demand in October - Velocity has all by died out. People seem to be sitting on the sidelines

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Ali Wolf

@AliWolfEcon

2 years

I'm sure I'll get some flak for this, but I'm utterly shocked that only 20% of economists in the Pulsenomics survey think home prices could turn negative over the next FIVE years.

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Ali Wolf

@AliWolfEcon

1 year

A lot of enthusiasm around the housing market here in Tampa. National builder said this is their second best mkt nationwide behind Orlando; heard one builder already hit Jan goal; another said Jan sales are better than last Jan. Price cuts and incentives are proving effective

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Ali Wolf

@AliWolfEcon

4 months

Talked to a handful of builders today in Tampa about mortgage rate buydowns. Most were willing to put $20-50K towards them. This translates to rates in the mid-to-high 5%s for buyers

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Ali Wolf

@AliWolfEcon

2 years

Among some of the most popular migration paths, the narrowing price spread between Denver and Boise stands out. Boise used to be 35% cheaper than Denver. Now: 14%

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Ali Wolf

@AliWolfEcon

11 months

A big clarification needs to be made. I keep hearing new homes are 30% of SALES. They aren’t. They are 14% of sales (up from 8-10% historically). New homes represent 30% of INVENTORY

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