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Waning demand pushes US homebuilder confidence to the lowest level in 3 years

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Rising home prices have left many US homebuyers and homebuilders deflated, according to a new report by the National Association of Home Builders (NAHB).

As prices and interest rates continue to rise, some buyers are choosing to put their purchasing plans on hold — and homebuilders are taking notice.

“The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market,” said Robert Dietz, NAHB chief economist, in a statement.

Builder confidence in the market for newly built single-family homes fell four points to a reading of 56 in December on the Housing Market Index (HMI). Previously, the HMI had fallen 8 points to a reading of 60 in November.

Although this is the lowest HMI reading recorded since May 2015, builder sentiment remains in positive territory — for now, at least.

The NAHB HMI is derived from a monthly survey that gauges builder perceptions of current and future single-family home sales, as well as buyer foot traffic as “good,” “fair” or “poor.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All components that make up the HMI posted declines in December.

The index that measures current sales conditions fell six points to a reading of 61 and the component that gauges future sales expectations dropped four points to 61.

Reflecting eroding affordability and waning demand, the buyer traffic component edged down two points to 43 — indicating “poor” conditions persist.

“We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said Randy Noel, NAHB Chairman, in a statement.

The slip in buyer demand could also prove to be a harbinger of what’s in store for the US economy in 2019.

“This housing slowdown is an early indicator of economic softening, and it is important that builders manage supply-side costs to keep home prices competitive for buyers at different price points,” says Dietz.

Still, the biggest challenge facing homebuilders isn’t rising prices or interest rates, but the shortage of skilled labor, says Dietz.

“The skilled labor shortage is having the greatest impact on the slow growth rate of the industry. Housing could grow exponentially faster if there was more labor available,” Dietz tells Livabl.

Despite the housing industry adding between 80,000 and 100,000 new workers over the last year, over 270,000 jobs are still unfilled — a post-recession high. The number of unfilled positions has remained above peak levels for the last two years.

The stark reality is that without more homes available on the for-sale market, competition and prices are likely to remain high through the end of 2019 — and beyond.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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