At wells fargo securities.
She is with me from charlotte.
Good to see you again.
Thank you for having me.
What about these july numbers, why were they so much better than expected?
Of course, if we look at the previous two months, we saw weakness, but especially if we zero in on last month, one of the things we noted was the significant drop was odd, confined to the south.
In this report, we saw a rebound in those numbers.
Of course, this is the second time housing starts have been above the one million mark.
Talk more about this regional breakdown for home construction.
What did it look like?
We saw pretty much broad-based increases.
The midwest did see a decline.
One of the things we have to keep in mind is that when we look at the south in particular, that is where a lot of the home inventory resides.
We are also showing that a lot of the activity in those regions where there is high tech, of course, energy, job prospects, as well as population driving a lot of the activity.
So we continue to look in those areas to see where a lot of the housing will be needed.
Single-family home construction rose last month 8.3%, but multifamily construction jumped nearly 29%. is this a renters market and not a buyers market?
If you step back and look at the trends in multi family, specifically apartment, we continue to see solid demand in apartments.
Of coarse, that multifamily component is volatile, so we will probably see some pay back of that next month, however, the trend is obvious.
We continue to see a pickup.
In the single-family market, there has been a host of mixed messages that we have seen, specifically looking at sales activity for existing home sales.
That has been positive but if we look at the new home sales number four june, that was negative, and pending was down.
We can also point to other indicators that shows weakness in the housing market.
We are still looking for an improvement but it is not the big bang that we were expecting.
I am speaking to anika khan, senior economist at wells fargo year potential first-time buyers, are they still at the mercy of flat wages and tight lending standards?
When we zero in on first-time homebuyers, we think that that is a big reason why we are seeing a slower paced housing recovery.
40% is where we would like to see the number.
When we zero in on who are the first-time homebuyers, they are still largely the millennial generation who has a higher propensity to rent.
Going back to those multifamily and apartment demand numbers, we continue to see there is some momentum there, and it will take time for that younger cohort to move into a single-family.
Given that fed chair janet yellen has expressed concern about the housing market, do the july numbers give the fed and groomed to maintain the status quo and keep interest rates near zero for longer than anticipated, but most economists?
That is a really good question.
You cannot zero in on just one month.
You have to step back and look at the trend.
You are correct, the verbiage in the statement said the housing recovery has been slow.
The pace is still slow.
I do not think it is the only factor, of course, that the fomc is looking at.
We know the committee is looking at a host of indicators, the labor market, and wages specifically.
That will continue to be some of the discussion we continue to hear, especially as we look at jackson hole upcoming.
Anika khan, senior economist from wells fargo, thank you for joining us.
Always good to see you.
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