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Home Depot's Sales Rebound Muted by Inflation in Fuel and Lumber
Home Depot Inc.'s sales rebounded last quarter as Americans took on more remodeling projects, but rising costs for lumber and transportation are weighing on profitability.
[...] Home Depot and its smaller rival Lowe's Cos. are often seen as proxies for the health of the housing sector because property owners spend more on their homes when they believe values are rising. But for several quarters there's been increasing concern that years of robust home-price gains are cooling. For its part, Home Depot has continually said that a shortage of available homes in many markets would actually underpin higher home-improvement spending.
[...] Even as the overall housing market looks to be cooling, several trends are driving demand for home-improvement products. A shortage of available listings has slowed property purchases, causing some owners to opt for sprucing up their homes instead. Additionally, more people are staying longer in their homes, which also supports the uptick.
The labor market also plays a role: A strong run of hiring, coupled with moderate wage growth, has boosted Americans' wherewithal to spend money on fixing up their homes. Spending on home improvement -- which accounts for about 38 percent of private residential construction outlays -- surged 13.8 percent in June from a year earlier to reach $221 billion, according to Commerce Department data. Going forward, the job market may continue to propel housing and remodeling demand. But potential hurdles include a pickup in mortgage rates, a shortage of skilled workers for building and remodeling projects, and rising costs for construction materials such as lumber, which is affected by tariffs.
(Score: 4, Informative) by AthanasiusKircher on Wednesday August 15 2018, @03:47PM (1 child)
Have you ever been a landlord? If you had, you'd probably understand why.
You may be the sort of person who is a responsible tenant. Most people are not. They don't pay rent on time. They don't take care of the rental property or inform the landlord if potentially major issues with the property come up, leading to major repairs down the road. (Conversely, some complain constantly about minor things.) Many cause significant damage to the rental property.
Many homeless people have other problems other than just homelessness. They have major financial issues that would preclude them from even paying a minimal rent. They may have personal or mental problems that would raise the chances of problems for a property owner (increased risk of damage, etc.). A simple cost-benefit analysis for most banks would probably indicate that they're better off financially by having the home vacant for a little while until they can auction, rather than take a chance with a tenant who could make the property worth significantly less.
And, banks generally don't want to be in the property ownership business -- they ultimately want to sell the property and get rid of it. Selling a rental property with a tenant is often much more complicated. And if these are houses, many potential buyers may actually want to live there, so the only time a sale can happen is if the tenant is moving out. And many bad tenants refuse to leave, so you need to deal with evictions (and those who are evicted are even more likely to trash a place before they leave).
Being a landlord is a massive headache if you roll the dice and get bad tenants, which is why many folks who own only a few properties tend to let a larger property management company deal with it for them (even if they take a large cut).
I doubt your linked statistic is correct for today, since vacancy rates have gone down significantly in the past decade. But I also don't doubt there at least enough vacant home to house all homeless people, if it were possible to divert resources in that way. Unfortunately, logistically, it often isn't feasible.
(Score: 1) by khallow on Thursday August 16 2018, @02:22AM