6 million renters face eviction in 8 days when a Trump-era ban expires. Biden is poised to let it happen.

Joe Biden
President Joe Biden speaks on the economy at Cuyahoga Community College Manufacturing Technology Center, on May 27, 2021, in Cleveland, Ohio.

  • Both a federal eviction ban and a moratorium on foreclosures expire in eight days.
  • Some advocates are pushing for an extension of the eviction ban as new virus cases pile up.
  • The Biden administration is poised to allow both relief programs to expire on July 31.
  • See more stories on Insider’s business page.

On July 31, a set of pandemic-relief measures for renters and homeowners enacted under President Trump will end – and the Biden administration doesn’t appear interested in renewing them.

A federal eviction ban is ending on July 31 after an extension last month. It’s the same for a moratorium on foreclosures. But the Biden administration rolled out a new measure allowing homeowners to refinance their mortgages and cut monthly payments in an effort to aid 1.8 million Americans still in forbearance.

Still, some groups are pushing for the White House to take more aggressive steps to prevent people from losing their homes.

On evictions, advocates say the emergency measure’s end threatens 6 million renters who are at risk of losing their homes at a moment new infections are rising and a federal program to help them has been very slow to provide rent relief.

“The CDC eviction moratorium is a necessary public health measure to lessen spread of/deaths from COVID-19,” Diane Yentel, president of the National Low-Income Housing Coalition, recently wrote on Twitter. “The need clearly remains as Delta surges & 6m renter households remain behind on rent & at risk of eviction when moratorium expires.”

Paul Williams, a fellow at the Jain Family Institute, projected that 80% of all households struggling with rental debt are in counties experiencing a surge of virus cases due to the Delta variant.

“Letting county courts kick people onto the street next week is probably the worst Delta variant strategy I can think of,” he wrote on Twitter.

Around 11.4 million renters – or 16% overall – have fallen behind on rent payments, according to an analysis of Census data from the left-leaning Center on Budget and Policy Priorities. Around 3 million people said they could be evicted within a mere two months. Some courts ruled the ban unconstitutional earlier this year, Insider’s Ayelet Sheffey reported.

Separately, the Biden administration is allowing homeowners to extend the length of their mortgage. The White House said Friday that homeowners with mortgages backed by Fannie Mae and Freddie Mac can still delay their payments until September 30.

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Americans are binging on big houses, and it’s locking millennials out of the housing market

couple standing in front of new home

If you’re a millennial or a first-time buyer excited to purchase a starter home, you’ll probably have trouble finding one. Not only are starter homes at a 50-year low, but the size of the typical American house getting built is bigger than prior decades, which suggests starter homes aren’t just low because of supply and demand. Not enough are being built.

The US has been underbuilding for years and not keeping up with buyer demand, but less of the small starter home is being built as well.

“Due to supply-side challenges, including higher regulatory costs and limited lot availability, it has been relatively more difficult to build entry-level homes over the last decade,” Robert Dietz, chief economist for the National Association of Home Builders, told Insider in an email. “In fact, due to these factors, new home size increased between 2010 and 2014. For entry-level buyers, these factors have made homebuying more difficult by limiting available inventory.”

According to Freddie Mac data as reported on by the Wall Street Journal, there are fewer entry-level homes – homes of 1,400 square feet or less – than in decades. In fact, they have declined each decade to their current five-decade low. Per Freddie Mac’s analysis of Census data, the average number of entry-level homes built per year has declined from 418,000 in the late 1970s to 55,000 in the 2010s.

This could be bad news for millennials, as Freddie Mac notes in a May 2021 report that the generation is “at their peak first-time homebuying age.”

“We’ve got a record number of entry-level, demand buyers: the millennials coming into the market,” Sam Khater, Freddie Mac’s chief economist, told the Wall Street Journal. “And yet we’ve had a seven- or eight-year decline in entry-level homes, and that’s not going to change.”

Looking across two decades’ worth of data, supply for single-family starter homes has gone down. The following chart shows starter homes built as a percentage of total single-family homes completed.

Insider’s Taylor Borden reported that entry-level homes are great for millenials looking for something affordable, as this generation holds less wealth than their parents did at their age, but there aren’t a lot to go around these days.

At the same time, the floor area of homes being built has climbed from previous decades, although it’s gone down in recent years. The median floor area of a single-family home completed in 2020 was 2,261 square feet, per Census data.

As seen in the above chart, single-family homes have increased in size from previous years but dipped since 2015. Rose Quint, NAHB’s assistant vice president for survey research, previously told Insider this is because homes “reflected the preferences of those buyers that were still in the game.​​”

Based on Census’ housing characteristic data, 32% of the 912,000 single-family homes built in 2020 were 1,800 to 2,399 square feet, while entry-level homes made up only 7%, or 64,000, of single-family homes completed.

While the square footage of homes has climbed, lots have become smaller. A post by StorageCafé based on housing data from the Census said the typical American house is 4% bigger than 10 years ago, but the typical lot size is about 18% smaller. Lot sizes do vary, though, with Indianapolis having the largest lot size among the 20 largest US cities, per StorageCafé.

“The high demand for new housing in urban hotspots, low availability of land in those areas, growing construction costs, and Americans’ preference toward larger homes all converge, resulting in large new single family homes that make the most of their land plots,” Maria Gatea, STORAGECafé senior editor, told Insider in an email, noting median home sizes in these 20 cities have increased. “This means that first-time homebuyers have to compromise for space and move further away from downtowns.”

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The ‘Great American Land Rush’ is wiping out the starter home

starter house
Millennials can barely get their hands on a starter house.

  • The number of starter homes on the market sits at a 50-year low, per Freddie Mac data.
  • It’s not good news for millennials, many of whom are first-time homebuyers fueling a housing boom.
  • A housing expert recently told the WSJ that it’s creating a “Great American Land Rush.”
  • See more stories on Insider’s business page.

Starter homes are running dry, and it’s a big pain for those who need them most – millennials.

The generation, which turns ages 25 to 40 this year, has reached peak age for first-time homeownership. More millennials became homeowners than any other generation in 2020, driving a yearlong housing boom.

But this increased demand from millennials in an era of remote work, coupled with a lumber shortage and the fact that contractors have been underbuilding over the past dozen years, has exacerbated a shrinking housing inventory, with record-high prices for remaining houses.

As bidding wars rife with all-cash offers and higher down payments heat up the market, many millennials face the second housing crisis of their adulthoods.

There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, Daryl Fairweather, chief economist at Redfin, previously told Insider. Data from Freddie Mac shows that the housing shortfall has led to a decline in entry-level homes – the ones most affordable for millennials.

Freddie Mac defines an entry-level home as one under 1,400 square feet. Its data reveals that the current supply sits at a 50-year low. In the late 1970s, about 418,000 entry-level homes were built on average per year. In 2020, only 65,000 entry-level homes were built, even though 2.38 million first-time homebuyers purchased a home that year.

“There just aren’t enough of these homes to fulfill the demand,” Ed Pinto, director of the American Enterprise Institute, recently told The Wall Street Journal. “It’s creating this ‘Great American Land Rush,’ as I call it. People are moving around and there’s tremendous demand, but the inventory is down.”

The fall of the starter home

Housing was largely an out-of-reach dream for millennials for years. Even before the pandemic, they were struggling to take advantage of historically low mortgage rates as soaring living costs, student debt, and the fallout of the Great Recession made saving up for a down payment difficult.

They were already contending with a dwindling starter home supply back then.

In 2018, starter homes represented just 20.9% of available housing inventory in the US, according to Trulia. And a Realtor.com report at the end of 2019 predicted that while low interest rates would make it easier for millennials to buy, a shortage of entry-level homes would prove to be a major obstacle, largely because newbuilds that year were mostly devoted to “upper-tier housing” that cost at least $500,000.

Real-estate investors were only making the problem worse. In 2018, they bought roughly 20% of US starter homes – twice as many as they did 20 years ago, The New York Times reported, citing real-estate data provider CoreLogic.

Now, the pandemic and its consequent recession have added fuel to the fire just as millennials were finally recovering from their accumulated economic woes. “Now that they have economically recovered and are looking to buy a home for the first time, we’re faced with this housing shortage,” Fairweather told Insider. “They’re already boxed out of the housing market.”

Are you a millennial feeling shut out of the housing market? Email this reporter at hhoffower@insider.com.

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US stocks trade mixed with Nasdaq at a record high as investors weigh recovery signals

Stock Market

US stocks closed mixed on Wednesday, with the S&P 500 making turning lower late in the day while the Nasdaq ended at a record high.

“US stocks are stabilizing as investors are clearly in wait-and-see mode over the current wave of inflationary pressures,” Edward Moya, senior market analyst at Oanda, said in a statement. “Equities have quickly bounced back from last week’s Fed-induced selloff as investors quickly realize interest rates will not move anytime soon.”

Equities were up and down throughout the day, dipping lower after Atlanta Fed President Raphael Bostic said the central bank could raise rates in 2022, as well as start tapering asset purchases in the near term. He also said higher inflation in the US could last up to nine month.

The US 10-year Treasury note was last at 1.492%. On Tuesday, yields fell 2 basis points, responding to the Fed’s more tempered policy outlook.

Here’s where US indexes stood at the 4:00 p.m. ET close on Wednesday:

Microsoft still has 23% upside potential even after it surpassed a $2 trillion valuation on Tuesday, according to Wedbush analyst Dan Ives. He also increased his price target to $325 from $310 and reiterated his “outperform” rating on the stock.

Mortgage giants Fannie Mae and Freddie Mac plunged as much as 45% following a ruling from the Supreme Court. In a 7-2 decision, the court gave the US President authority to remove the head of the Federal Housing Finance Agency, complicating the prospects for their release from government control.

Meanwhile, the cryptocurrency space has been recovering from its most recent sell-off.

Bitcoin staged a rebound after wiping out all its gains for 2021 at one point the day prior. The world’s largest cryptocurrency climbed as much as 6% to $34,821.53.

Cathie Wood’s ARK ETFs took advantage of last week’s crypto carnage to load up on shares of Coinbase and Grayscale Bitcoin Trust, fund filings show.

Crypto exchange FTX announced it is partnering with Major League Baseball to become the first cryptocurrency exchange sponsor in professional sports.

Oil rose ahead of a meeting of the OPEC+ group next week.

West Texas Intermediate crude climbed 0.48% to $73.20 per barrel. Brent crude, oil’s international benchmark, jumped by $0.57% to $75.24 – edging to its highest since late 2018.

Gold slightly rose 0.03% to $1,778.03 per ounce.

Lumber fell as much as 3% to $859.8 per thousand board feet, extending the fall beneath $900 as the commodity’s rally continues to cool off.

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US mortgage rates hit a 9-month high – and they’ve been climbing since January as inflation fears rise

Model homes and for sale signs line the streets as construction continues at a housing plan in Zelienople, Pa., Wednesday, March 18, 2020.  U.S. new home sales fell 4.4% in February with bigger declines expected in coming months as the coronavirus puts a major crimp on home sales. (AP Photo/Keith Srakocic)
Model homes and for sale signs line the streets as construction continues at a housing plan in Zelienople, Pa., Wednesday, March 18, 2020. (AP Photo/Keith Srakocic)

  • The average 30-year fixed mortgage rate rose to 3.09% this week, its highest level since June.
  • Rates have been rising since January as markets gird for economic reopening and stronger inflation.
  • Still, demand for homes is handily outstripping supply as new construction fails to accelerate.
  • See more stories on Insider’s business page.

Mortgage rates continue to climb in the US as concerns of rising inflation counter past months’ historically low borrowing costs.

The average 30-year fixed mortgage rate rose to 3.09% this week, according to data from Freddie Mac. That’s the highest level since late June and compares to a reading of 3.05% one week prior. Still, the 30-year rate average sits well below its year-ago level of 3.65%.

The average 15-year fixed mortgage rate rose to 2.4% from 2.38% last week to hit, hitting its highest point since September.

Mortgage rates have steadily risen since January as investors position for stronger inflation as the economy rebounds. Treasury yields underpin a wide range of borrowing rates including those for home loans, and the recent sell-off in government bonds placed upward pressure on mortgage rates. The 10-year yield rose to a 14-month high following the Federal Reserve’s March policy meeting on Wednesday, signaling rates will trend higher in the coming weeks.

The trend hasn’t yet pushed potential buyers out of the market, Sam Khater, chief economist at Freddie Mac, said in a statement. While the 30-year average rate now sits well above its January floor of 2.65%, borrowing costs are still relatively low. Robust demand for new homes also signals the housing market boom has plenty of staying power, the economists said.

“Residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers,” Khater added.

More barriers than just higher mortgage rates

The housing market was one of the few pockets of the economy to see activity surge through the pandemic. The Federal Reserve’s decision to cut interest rates to record lows one year ago dragged mortgage rates to historically low levels and spurred fresh demand.

But while interest rates remain near zero, mortgage rates have been more closely tracking Treasury yields. The near-zero rates that sparked the housing boom are no longer its primary driver.

New hurdles have emerged from the strained relationship between buyers and builders. Home prices shot higher as demand handily outstripped supply. And though rates have risen through the spring, contractors are still unable to keep up with the market.

That supply-demand imbalance is now forcing potential homebuyers to pay above listing prices just to secure a purchase. The sale-to-list price ratio tracked by Redfin rose to 100.1% for the week that ended March 7, its highest level since data collection began in 2016. The firm also found median sales prices for newly listed homes reached a record high and that new listings were down 17% year-over-year.

Even pricier materials are contributing to soaring home costs. The National Association of Homebuilders said last month that factory shutdowns last March slammed lumber supply chains and led to a spike in the commodity’s price. Elevated lumber costs now add roughly $24,000 to the price of a new home, NAHB Chairman Chuck Fowke told HousingWire.

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