Window on a $4.1 trillion budget proposal
The big-picture story on President Trump’s budget proposal is its intention to balance the federal budget by 2027, reducing discretionary spending by $1.5 trillion over 10 years.
The budget touches on a number of issues important to the housing and building supply industry. The National Lumber and Building Material Dealers Association identified the following highlights.
• As part of the proposed cuts to the EPA, enforcement for the Lead: Renovation, Repair, and Painting program is defunded. Although the regulation would remain in effect, responsibility for enforcement would be the responsibility of each state. There are 14 states authorized to run their own RRP programs: Ala., Del., Ga., Iowa, Kan., Mass., Miss., N.C., Okla., Ore., R.I., Utah, Wash., and Wis.
• The White House budget eliminates the entire $10.5 million for the Susan Harwood grant program, which funds nonprofit organizations that provide worker safety-training programs. It has existed since 1978.
• The budget also proposes eliminating several HUD programs, including the HOME Investment Partnership program, which provides funding for activities such as building and rehabilitating affordable housing for rent and homeownership. HOME is receiving $950 million in funding for the current fiscal year.
• An overhaul of the tax code is included in the budget. It reduces the number of personal income tax brackets from 7 to 3, lowers the business tax rate for both pass-throughs and corporations to 15%, and doubles the standard deduction.
Looming over the budget debate is the need to raise the debt ceiling that sets a limit on money the government can borrow.
Next Big Thing: Project planning with VR
Lowe's is helping shoppers better envision how to design and build their homes.
Though a partnership with Google, Lowe’s launched the Lowe's Vision app. Powered by Tango, a 3D technology developed by Google, the app leverages augmented and virtual reality to enable shoppers to begin planning their renovation needs before they even set foot inside a store.
“The Lowe's Vision app enables customers to easily measure any room in their home with the touch of a finger, and style it with virtual Lowe's products in real-time through augmented reality,” according to Lowe’s. The app is available to shoppers using the Tango-Enabled Phab 2 Pro smartphone.
Augmented and virtual reality is not a new project for Lowe’s. For the past two years, the chain has been developing visualization capabilities using these 3D reality tools. Lowe’s most recent initiative includes its “Holoroom How To” virtual reality-based classes, where a virtual reality headset and set of controllers immerses shoppers in a DIY project.
This adds to the other recently launched Lowe's Vision app functionality of In-Store Navigation, which taps into the power of augmented reality. Billed as the first retail application of indoor mapping using augmented reality to guide shoppers around the store.
Home prices rise across the U.S.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 5.8% annual gain in March, up from 5.7% last month and setting a 33-month high. Seattle, Portland and Dallas led the way with the highest year-over-year gains among 20 cities tracked by the index, with scores growing 12.3%, 9.2% and 8.6%, respectively.
“Sales of both new and existing homes, housing starts and the National Association of Home Builders’ sentiment index are all trending higher,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale. People are staying in their homes longer rather than selling and trading up. If mortgage rates, currently near 4%, rise further, this could deter more people from selling and keep pressure on inventories and prices. “
Blitzer added: “While prices cannot rise indefinitely, there is no way to tell when rising prices and mortgage rates will force a slowdown in housing.”
The following chart shows the latest S&P CoreLogic Case-Shiller Indices for 20 cities, and the year-over-year change.
Atlanta 134.81, up 5.5%
Boston 198.26, up 7.7%
Charlotte 145.96, up 6.7%
Chicago 136.97, up 5.1%
Cleveland 112.80, up 4.3%
Dallas 173.43, up 8.6%
Denver 194.23, up 8.4%
Detroit 111.01, up 7.0%
Las Vegas 156.51, up 6.4%
Los Angeles 257.44, up 5.3%
Miami 221.25, up 6.0%
Minneapolis 156.64, up 6.8%
New York 186.85, up 4.1%
Phoenix 166.32, up 5.6%
Portland 213.13, up 9.2%
San Diego 235.61, up 6.5%
San Francisco 235.23, up 5.1%
Seattle 216.79, up 12.3%
Tampa 188.73, up 5.1%
Washington 218.11, up 4.2%
Composite-10 209.11, up 5.2%
Composite-20 195.39, up 5.9%
U.S. National 186.95, up 5.8%