Rocket Fuel Newsletter – What’s behind the housing market stall?

It’s almost time to say goodbye to the penny. The U.S. Treasury is phasing out one-cent coins, aiming to save millions of dollars, though it could end up costing more if nickel production subsequently ramps up. So, if you’ve got a jar full of pennies at home, they may soon be more collectible than spendable.

This week, we explore current housing market trends and constructing for climate change.

Fuel up! 🚀

Home buyers hit pause

Home sales and new construction have slowed significantly this spring, with last month marking the weakest April for existing home sales in 16 years.

High mortgage rates, elevated home prices, and an unpredictable construction environment made worse by tariffs on materials like Canadian lumber have left both buyers and builders hesitant. Rather than jumping into the market, many Americans are choosing to wait it out, holding off on purchases and watching listings cool.

Doubling down on renovations

Despite low home sales and new constructions, U.S. homeowners are continuing to spend, particularly on repairs and renovations. Home improvement spending climbed 0.5% to $513 billion in the first quarter of this year and is projected to rise to $526 billion by the first quarter of next year.

This increase is driven by aging homes, high mortgage rates, and limited housing supply. While retail sales overall have cooled, spending at building and garden supply stores such as The Home Depot is on the rise, underscoring a strong consumer appetite for staying put and fixing up.

Building smarter for storm season

Alabama’s investment in home fortification grants and insurance incentives appears to be paying off both financially and structurally.

A new report from The University of Alabama found that homes built or upgraded to withstand extreme weather sustained far less damage during Hurricane Sally in 2020. These resilient homes not only saved homeowners and insurers millions of dollars in repair costs, but also contributed to a more stable insurance market.