Weak Start to Spring Housing Market

Higher mortgage rates and concern over the broader economy are making for a weak start to the all-important spring housing market. Sales of previously owned homes in March fell 5.9% from February to 4.02 million units on a seasonally adjusted annualized basis, according to the National Association of Realtors. That’s the slowest March sales pace since 2009.

Sales Trends

Sales were 2.4% lower than in March 2024 and slumped across all regions month to month. They fell hardest in the West, the priciest region of the country, down more than 9%. The West, however, was the only region to see a year-over-year gain, due to strong activity in the Rocky Mountain states, where job growth is strong. This count is based on closings, therefore contracts likely signed in January and February, when the average rate on the popular 30-year fixed mortgage was over 7%. It did not fall solidly below 7% until Feb. 20, according to Mortgage News Daily.

Affordability Challenges

"Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates," said Lawrence Yun, NAR’s chief economist. "Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society." Sales fell despite a sharp increase in available listings. At the end of March, there were 1.33 million units for sale, an increase of nearly 20% from March 2024. At the current sales pace, that is equivalent to a 4-month supply, which is still on the lean side. A 6-month supply is considered a balanced market between buyer and seller.

Impact on Prices

More inventory and slower sales are starting to put a chill on prices. The median price of an existing home sold in March was $403,700. That is still an all-time high for the month, but it’s only up 2.7% from last March. That annual comparison has been shrinking since December and is the smallest gain since August. "In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights," Yun said. "With real estate asset valuation at $52 trillion, according to the Federal Reserve Flow of Funds, each percentage point gain in home prices adds more than $500 billion to the household balance sheet."

Buyer and Seller Trends

First-time buyers made up 32% of the market in March, the same as in March 2024. Historically they make up roughly 40%. All-cash sales dropped to 26% from 28% the year before, but investors held steady at 15% of sales. Looking ahead, the NAR is already reporting a rise in canceled contracts in March, and, given the stock market volatility in April, that could increase.

Outlook

"March numbers are bad, but they’re likely to get worse," said Robert Frick, corporate economist with Navy Federal Credit Union. "In addition to the existing pressures of high prices and high mortgage rates, prices for home furnishing will likely rise soon due to tariffs, and rising anxiety among consumers over inflation and jobs may magnify the instinct to hunker down already being felt by many families."

Conclusion

The spring housing market is experiencing a weak start due to higher mortgage rates and concerns over the broader economy. Sales of previously owned homes fell in March, and prices are starting to feel the chill. As the market continues to evolve, it’s essential to monitor trends and adjust expectations accordingly.

FAQs

Q: What is the current state of the spring housing market?
A: The spring housing market is experiencing a weak start due to higher mortgage rates and concerns over the broader economy.
Q: How did sales of previously owned homes perform in March?
A: Sales of previously owned homes in March fell 5.9% from February to 4.02 million units on a seasonally adjusted annualized basis.
Q: What is the median price of an existing home sold in March?
A: The median price of an existing home sold in March was $403,700, which is still an all-time high for the month, but only up 2.7% from last March.
Q: What percentage of the market did first-time buyers make up in March?
A: First-time buyers made up 32% of the market in March, the same as in March 2024.
Q: What is the outlook for the housing market?
A: The outlook for the housing market is uncertain, with potential for further decline in sales and prices due to existing pressures and rising anxiety among consumers.

Introduction to the Trade War

China has ordered its airlines not to take any further deliveries of Boeing Co. jets as part of the tit-for-tat trade war that’s seen US President Donald Trump levy tariffs of as high as 145% on Chinese goods.

Impact on Boeing

Boeing could hand over some of its aircraft that were destined for Chinese airlines to other carriers after China stopped taking deliveries of its planes amid a trade war with the United States. Boeing CEO Kelly Ortberg told CNBC’s "Squawk on the Street" on Wednesday, "They have in fact stopped taking delivery of aircraft due to the tariff environment."

Aircraft Redistribution

Ortberg said that a few 737 Max planes that were in China set to be delivered to carriers there have been flown back to the U.S. He said some jets that were intended for Chinese customers, as well as aircraft the company was planning to build for China later this year, could go to other customers. "There’s plenty of customers out there looking for the Max aircraft," Ortberg said. "We’re not going to wait too long. I’m not going to let this derail the recovery of our company."

Boeing’s Financial Performance

The CEO’s comments came after Boeing reported a narrower-than-expected loss for the first quarter and cash burn that came in better than analysts feared as airplane deliveries surged in the three months ended March 31.

Trade War Escalation

President Donald Trump earlier this month issued sweeping tariffs on imports to the U.S. While he paused some of the highest rates, the trade war with China has only ramped up. Trump said Tuesday that he’s open to taking a less confrontational approach to trade talks with China, calling the current 145% tariff on Chinese imports "very high." "It won’t be that high. … No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero," Trump said.

Conclusion

The trade war between the US and China has significant implications for Boeing, with China’s decision to stop taking deliveries of Boeing jets affecting the company’s sales and revenue. However, Boeing is exploring alternative options, including redistributing the aircraft to other customers. The trade war is ongoing, with both countries imposing tariffs on each other’s goods, and it remains to be seen how the situation will be resolved.

FAQs

Q: Why has China stopped taking deliveries of Boeing jets?
A: China has stopped taking deliveries of Boeing jets due to the tariff environment and the ongoing trade war with the US.
Q: What will happen to the Boeing jets that were intended for Chinese customers?
A: Some of the jets may be redistributed to other customers, as there is still demand for the aircraft.
Q: How has the trade war affected Boeing’s financial performance?
A: Boeing reported a narrower-than-expected loss for the first quarter, and cash burn came in better than analysts feared, despite the challenges posed by the trade war.
Q: Is the trade war between the US and China likely to be resolved soon?
A: It is unclear when the trade war will be resolved, as both countries continue to impose tariffs on each other’s goods and negotiations are ongoing.

The global labor movement is experiencing a significant surge, with Asia being at the forefront of the action. Global labor movement updates indicate a rise in worker dissatisfaction, leading to widespread strikes and protests across the region. In recent years, countries such as China, Japan, and South Korea have seen a significant increase in labor disputes, with workers demanding better wages, working conditions, and benefits.

Overview of the Situation

The labor movement in Asia is driven by various factors, including low wages, long working hours, and poor working conditions. Workers in the region are becoming increasingly aware of their rights and are organizing to demand better treatment from employers. The rise of social media has also played a significant role in mobilizing workers and raising awareness about labor issues.

China’s Labor Movement

China, the world’s second-largest economy, has seen a significant increase in labor disputes in recent years. In 2020, the country experienced over 1,700 labor protests, with workers demanding better wages, benefits, and working conditions. The Chinese government has responded to the protests by increasing the minimum wage and implementing new labor laws, but many workers feel that more needs to be done to address their concerns.

Japan’s Labor Movement

Japan, another major economy in the region, has also seen a rise in labor activism. In 2020, Japanese workers staged a series of strikes and protests, demanding better wages and working conditions. The Japanese government has responded by increasing the minimum wage and implementing new labor laws, but workers are seeking more significant changes.

South Korea’s Labor Movement

South Korea has a long history of labor activism, and in recent years, the country has seen a significant increase in strikes and protests. In 2020, South Korean workers staged a series of strikes, demanding better wages, benefits, and working conditions. The South Korean government has responded by increasing the minimum wage and implementing new labor laws, but workers are seeking more significant changes.

Causes of the Labor Movement

The labor movement in Asia is driven by various factors, including low wages, long working hours, and poor working conditions. Workers in the region are becoming increasingly aware of their rights and are organizing to demand better treatment from employers. Some of the key causes of the labor movement include:

Low Wages

Low wages are a major concern for workers in Asia, with many earning barely enough to cover their living expenses. In countries such as China and Indonesia, workers are earning as little as $2-3 per hour, making it difficult for them to afford basic necessities.

Long Working Hours

Long working hours are another major concern for workers in Asia, with many working 12-16 hours per day, 6 days a week. This can lead to fatigue, stress, and other health problems, making it difficult for workers to maintain a healthy work-life balance.

Poor Working Conditions

Poor working conditions are also a major concern for workers in Asia, with many working in hazardous environments with limited access to safety equipment and training. This can lead to accidents, injuries, and illnesses, making it difficult for workers to maintain their health and well-being.

Impact of the Labor Movement

The labor movement in Asia is having a significant impact on the region, with workers demanding better wages, benefits, and working conditions. The movement is also having an impact on the global economy, with companies such as Apple and Nike facing criticism for their labor practices in the region.

Economic Impact

The labor movement in Asia is having a significant economic impact, with companies facing increased costs and decreased productivity. In 2020, the labor movement in China resulted in over $1 billion in lost productivity, making it a significant concern for companies operating in the region.

Social Impact

The labor movement in Asia is also having a significant social impact, with workers demanding better treatment and more respect from employers. The movement is also raising awareness about labor issues, making it a significant concern for companies operating in the region.

Conclusion

In conclusion, the labor movement in Asia is a significant and growing trend, driven by worker dissatisfaction with low wages, long working hours, and poor working conditions. The movement is having a significant impact on the region, with workers demanding better treatment and more respect from employers. As the global economy continues to evolve, it is essential for companies to prioritize labor rights and work towards creating a more equitable and just work environment.

Frequently Asked Questions

What is the current state of the labor movement in Asia?

The labor movement in Asia is currently experiencing a significant surge, with workers in countries such as China, Japan, and South Korea demanding better wages, benefits, and working conditions.

What are the main causes of the labor movement in Asia?

The main causes of the labor movement in Asia include low wages, long working hours, and poor working conditions.

How is the labor movement in Asia impacting the global economy?

The labor movement in Asia is having a significant impact on the global economy, with companies facing increased costs and decreased productivity.

What can companies do to address labor concerns in Asia?

Companies can address labor concerns in Asia by prioritizing labor rights, providing better wages and benefits, and improving working conditions.

What is the future of the labor movement in Asia?

The future of the labor movement in Asia is uncertain, but it is likely to continue to grow and evolve as workers become increasingly aware of their rights and demand better treatment from employers.