National Home Price Index data released
The S&P / Case-Shiller National Home Price Indices for May 2023 were released on Tuesday. The numbers showed that while regional housing markets vary from metro to metro, national home prices were down 0.5% year-over-year.
The 10-city Composite showed a decrease of 1.0%, and the 20-city Composite showed a 1.7% decrease year-over-year.
The biggest gains were in Chicago (+4.6%), Cleveland (+3.9%), and New York (+3.5%).
What are the experts predicting for the today’s Federal Reserve meeting?
It’s widely expected that the Federal Reserve will announce another interest rate hike this week when they announce their decision today.
However, a hike after a pause would be a historical anomaly. The Fed has only hiked interest rates after a pause once in its history. They have been known to extend pauses followed by rate cuts, but it’s been incredibly rare for the Federal Reserve to hike rates after pausing.
The Fed raised interest rates 10 times before last month’s pause, and has seen recent success in its fight against inflation. In June 2023, inflation only rose 3% compared to June 2022. June was the smallest year-over-year increase since March 2021. On a monthly basis, inflation only rose 0.2% month-over-month.
The tone of the announcement will also matter today. If the Fed hikes rates again, but indicates that another pause is up next, the market may react more positively. However, a hawkish tone could illicit a negative response from market movers.
How tricky is it to turn unused office space into housing?
A growing trend in the current market is to take unused office space and convert it into a residential living area, but it’s not as easy as it sounds. NPR did a recent report on how tough it really is to turn commercial units into residential space. It’s not easy.
First, a building needs to have the right kinds of windows and structure to be allowed to change from commercial to residential. Most commercial spaces weren’t built with the right windows or structure in the first place. Next, getting through zoning restrictions and local laws can be a challenge to work around. Then, you have to add walls, plumbing, and build a living space.
However, converting unused commercial space to residential would go a long way towards revitalizing downtown areas, adding available units to the housing market, and it’s better for the environment to convert space instead of building new. It’s likely that a lot of cities will continue to update laws and cut through red tape to enable these spaces to be used for housing instead of sitting empty.
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