US existing home sales, and prices, rise again in January - Long Island Business News

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US existing home sales, and prices, rise again in January - Long Island Business News Posted: 19 Feb 2021 08:06 AM PST Sales of previously occupied U.S. homes rose again last month, a sign that the housing market's strong momentum from 2020 may be carrying over into this year. Existing U.S. home sales rose 0.6% in January from the previous month to a seasonally-adjusted rate of 6.69 million annualized units, the National Association of Realtors said Friday. Sales jumped 23.7% from a year earlier. It was the strongest sales pace since October and the second highest since 2006. Home prices also rose. The U.S. median home price was $303,900 in January, an increase of 14.1% from a year earlier. Prices increased in every region of the country. The red-hot housing market has left the number of available properties for sale at record lows. The dearth of homes for sale has been the main driver of home prices. "Sales easily could have been even 20% higher if there had been more inventory and more choices," said Lawrence Yun, NAR's chief economist. At the end of January, there were an all-time low 1.04 million homes for sale nationally, down 1.9% from December and 26% from January 2020, NAR said. At the current sales pace, that amounts to a 1.9 months' supply, down from a 3.1 months' supply in January 2020. Underscoring how competitive the housing market was last month, 71% of homes sold in January had been on the market for less than a month. And properties were typically snapped up in 21 days for the fifth straight month, NAR said. "The days on the market continue to be very swift," Yun said. "No winter slowdown." The housing market has mounted a strong comeback since last summer after declining sharply in the spring when the coronavirus outbreak hit. Sales surged last year to the highest level since 2006 at the height of the housing boom. Several market trends are helping drive the strong demand for homeownership. Mortgage rates remain at historic lows. Americans forced to work from home in the pandemic are seeking larger homes. And more millennials are now entering the market. That demand dynamic, combined with a stubbornly low supply of homes for sale, will likely lead to fierce competition among buyers during the traditional homebuying season this spring. Still, economists predict the housing market will continue to ride a strong wave of demand this year, though mortgage rates may rise slightly from record lows if the economy improves as vaccines become more widely available. The average rate on the benchmark 30-year fixed-rate home loan rose to 2.81% this week from last week's 2.73%, according to mortgage buyer Freddie Mac. One year ago, the rate was 3.49%. The 10-year Treasury yield, which can influence interest rates on mortgages, made a sharp move higher this week as Wall Street factors in the possibility of higher inflation amid expectations the economy will regain its footing by the second half of this year. Even so, mortgage rates are expected to remain low with the Federal Reserve keeping interest rates near zero until the economy recovers. Homebuilders have boosted construction in response to the strong demand but still face supply constraints such as a lack of available building lots and sharp increases in the price of lumber and other building materials.

Texas governor's biggest donors: Energy industry that failed - The Associated Press Posted: 19 Feb 2021 07:27 AM PST AUSTIN, Texas (AP) — As frozen Texas reels under one of the worst electricity outages in U.S. history, Republican Gov. Greg Abbott has blamed grid operators and iced-over wind turbines but gone easier on another culprit: an oil and gas industry that is the state's dominant business and his biggest political contributor. And as the toll deepened Friday from a week of historic winter storms, which have killed more than 20 people in Texas, the dogpiling on a power grid that is proudly isolated from the rest of the country ignores warnings known by the state's GOP leaders for years. ADVERTISEMENT "It's almost like a murder suspect blaming their right hand for committing the crime," said Democratic state Rep. James Talarico. His suburban Austin home lost power for 40 hours and had no working faucets Thursday, when roughly one in four people in Texas woke up under instructions to boil water. Like most of the state's 30 million residents, Talarico's power is controlled by grid managers at the Electric Reliability Council of Texas, which Abbott again laid into Thursday after more than 4 million people at one point were enduring outages in subfreezing temperatures. But that is not where the responsibility ends, as power plants that feed the grid were knocked offline by the extreme cold, and natural gas producers didn't protect wellheads or lines from freezing. "ERCOT is a convenient whipping boy," Talarico said. The crisis has put the fossil fuel industry that lavishes the Texas Capitol with money in the crosshairs in ways that Abbott has not had to navigate when steering America's second-largest state through other disasters, including hurricanes and the ongoing pandemic. For the first time Thursday, Abbott called on Texas to mandate that power plants be winterized. Oil and gas built and enriched Texas, and with that its politicians, including those who became president. But none has reaped campaign contributions on the scale of Abbott, who in six years in office has raised more than $150 million from donors, more than any governor in U.S. history. Texas' energy interests are the biggest backers of his political rise, and he has not ruled out a White House run in 2024. More than $26 million of his contributions have come from the oil and gas industry, more than any other economic sector, according to an analysis by the National Institute on Money in Politics. ADVERTISEMENT As Texas' grid first began buckling early Monday, Abbott drew overnight backlash after going on Fox News and laying fault on solar and wind producers, at a time when natural gas, coal and nuclear energy systems were responsible for nearly twice as many outages. Pressed on those comments later, Abbott took a softer tone and acknowledged every source of power had been compromised. Frozen natural gas lines also left millions without power in Mexico. Abbott accused ERCOT of misleading the public with messages that the grid was ready for the storm. "It's especially unacceptable when you realize what ERCOT told the state of Texas," Abbott said. ERCOT is overseen by the Texas Public Utility Commission, whose three members are appointed by Abbott. While ERCOT manages most of Texas' power grid, the commission and the Texas Legislature made key policy decisions that have factored into the ongoing crisis. After the state's last major freeze, during the 2011 Super Bowl held in Arlington, Texas, a federal analysis found that energy producers' procedures for winterizing their equipment "were either inadequate or were not adequately followed" in many cases. The report repeatedly cites another Texas freeze, in 1989, as a clear warning. Girding power generators against fierce winter weather is essential in colder climates. In Iowa, where wind farms supply 40% of the state's electricity, windmills have been turning all week despite temperatures that dropped to minus 17 degrees (minus 27 degrees Celsius) in Des Moines. In Texas, grid officials say they can't speak for why power generators here don't do the same. A decade ago, the report on the last Texas failure listed a number of ways to winterize an oil well or a natural gas device and the estimated costs: installing a cold-weather production unit ($23,000), collecting gas vented from an injection pump to supply a heater ($675), or building a fiberglass hut to enclose the production equipment ($1,500). Winterizing 50,000 wells — just under a third of the number of total natural gas wells active in Texas — was estimated in 2011 to cost as much as $1.75 billion, a figure that would almost certainly be higher today due to inflation. By comparison, the Texas oil and natural gas industry paid $13.9 billion in taxes and royalties last year alone, according to figures from the Texas Oil & Gas Association. Republican Ryan Sitton, the former commissioner of the peculiarly named Texas Railroad Commission, which regulates the state's oil and gas industry, said an issue with bolstering power plants is the cost passed on to electric customers. Of Abbott's focus on ERCOT, Sitton said: "Calling for an investigation is easy. Actually performing a good investigation and taking ownership of the results is where the rubber meets the road." He said oil and gas interests, which generously funded his own political campaigns, don't hold the sway that the public imagines. "They make donations, sure. But unless the entire energy industry is speaking with a unified voice, which almost never happens, there's not that much influence," Sitton said. ___ Merchant reported from Houston. Associated Press writer Scott McFetridge in Des Moines, Iowa, contributed to this report.

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