Weekly News (April 6, 2022)
Interest Rate (14th Week)
(By Fairway Home Loan )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||2.875||2.500||2.750||1.558|
|A month ago||3.875||3.000||3.625||1.722|
Prime Rate:3.25% / Ref IR: 0.25- 0.50%
- 3% Down payment for 1st home buyer is available.
- 5% Down payment 2-4 units FHA program available.
- 15% Down payment 2 families -conventional program available.
- Potential home buyer — Have a pre-approval first before the shop. Now we have 48hour underwriting turn-around times for regular loans.
- Self employed borrower – Need to prepare 3 month business bank statements and the YTD Profit and Loss Statement. YTD income can’t decline more than 30% compared to last year.
- 2022 Conventional loan limit:
Conforming SFR : $647,200.00/ Conforming high balance: $970,800.00
Conforming 2 Family: $828,700/ Conforming High Balance: $1,243,050
Englewood Cliffs Mayor adds support after Murphy’s call to welcome Ukrainian refugees.
( The Record 4/6 )
- NJ is home to one of largest Ukrainian communities, and leaders across the state are expressing their support for accepting refugees.
- Last month, Gov Murphy wrote a letter to President Biden stating NJ’s willingness to accept refugees from Ukraine. This week, Englewood Cliffs became the latest municipality to show its support for refugees.
- The UN estimates that more than 4M people, mainly women, children, and the elderly, have fled from war-torn Ukraine. It is believed to be the largest forced migration in Europe since the Second WW. More than half of all Ukrainian children are now displaced, the UN says.
- NJ is home to roughly 57,600 people of Ukrainian ancestry, according to 2019 U.S. census data.
JPMorgan CEO Says Big Risks Loom for the U.S. Economy.
( WSJ 4/5 )
- JPMorgan Chase & Co CEO Jamie Dimon said the U.S. is facing unprecedented risks that have him preparing for dramatic upheavals.
- In his annual report to the shareholder, he mentioned that consumers and businesses are flush with cash, wages are rising and economy is growing rapidly after pandemic slowdown.
- Yet he warned that the war in Ukraine could collide with inflation to slow down the pandemic recovery and alter global alliances for decades. Along with the unpredictability of war itself and uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation. And he disclosed that JPMorgan could lose about $1B over time on its business in Russia.
- He also warned that the Fed could move interest rates significantly higher than the market expect. The Fed began raising rates last month and signaled several more increases this year, including a potential half percentage point instead of the traditional quarter point at the next meeting.
- Energy investments, he said are especially needed to wean the world off Russian oil and gas.
Heated Residential Market will not be cool down soon.
( Korea Times 4/4 )
- NYT reported that rapid increasing interest rates might not cool down the residential market on 31st, and said that home prices and interest rates could move up simultaneously.
- This phenomenon can be explained because of inflation and rent are increasing at the same time. 1) Rent increase could not provide priced out home buyers alternative option to lease. 2) In the past, experiences that investment on real estate is the better than stocks to guard inflation might trigger more demand for real estate investment.
- Another aspect to boost home prices is the lack of home supply: existing home inventory and new construction.
- Sam Carter, chief economist at Freddie Mac said increasing interest rates might help bit of balancing, but it cannot resolve structural issue in the housing market.
Buyers are disrupted due to near 5% home mortgage rates.
( Korea Daily 4/4 )
- Freddie Mac announced 4.6% mortgage interest rates as of 25th while it was 4.42% last week and 3.18% last year.
- Buyers are frustrated under the circumstances that both home mortgage rates and home price are moving up while income is not catching up accordingly. The condition of DTI makes impossible to buy homes for some buyers who were qualified to purchase before.
- MBA announced that mortgage application reduced 6.8% as of 25th, compared to the last week.
- The president of Fed Reserve Bank of Philadelphia, Patrick Harker said that 40 year-fixed mortgage can reduce monthly payment by 20% and recommend FHA and HUD to review the idea.
Cryptocurrency Mortgages Test Appetite of Home Buyers.
( WSJ 4/6 )
- Some Miami developers have enables buyers to purchase homes in cryptocurrency since at least 2021. Now a pair of Miami lenders is going one step further by offering home mortgages in digital currencies.
- Milo is a fintech company in the lending business, made the first crypto home loan in March, when it provided a 30-year mortgage in bitcoin for a Miami duplex.
- XBTO, another cryptofinance company with offices in Miami, said it is also gearing up to offer crypto mortgages this year, in partnership with traditional Miami-based mortgage lender.
- Many traditional lenders are skeptical that loans in digital currency will ever gain scale, and analysts list numerous risks and complication when lending in crypto. For one, if the crypto currency price drops significantly, lender may require a borrower to put up additional collateral.
Blackstone Plants a Flag in Boulder Biotech Hub.
( WSJ 4/6 )
- A unit of real-estate company Blackstone Inc is acquiring a sprawling life-sciences and office campus in Boulder, Colo, latest sign that the city at the base of Rocky Mountain is emerging as a hub for the biotechnology and pharmaceutical industries.
- Blackstone’s BioMed Realty Trust, Inc, a real estate owner that focuses on life science and technology buildings, is paying more than $600M for Flatiron Park, a 22-building complex.
- Blackstone owns and operates more than 13.7M sf of life-sciences space in the U.S. and U.K.
- During the pandemic, the company also made a $3.45B acquisition of property mostly in Cambridge, Mass., and recapitalized BioMed Realty for $14.6B.
- Despite all the demand, life-science real estate can still be a tricky business because tenants are highly dependent on venture capital and government funding.
The Rise of Indoor Vertical Farm.
( NYT 4/6 )
- Agricultural start-ups are growing food in controlled environments, creating demand for warehouses.
- A recently constructed 95,000 sf warehouse in Compton, Calif., tick off all the boxes for booming storage industry: 32-foot-high ceiling, a secure truck court and access to truck routs. But it won’t be sued for cargo or storage. Plenty Unlimited, an agricultural start-up based in San Diego, is using the site for an indoor vertical farm, expected to open later this year.
- Agriculture in a controlled environment has been around since the 1970s and what made moving indoors possible was a drop in price in LED lights, which plunges as much as 94% in 2015 from 2008.
- The term vertical farm was popularized by Dickson Despommier, a professor emeritus of environmental health science at Columbia Univ. Vertical farming is expected to grow to $9.7B worldwide by 2026, from $3.1B in 2021.
- Developers also request proximity to food distribution centers to save on transportation costs, said Brent Vernon, executive director of the Pennsylvania governor’s action team, which works to bring business to the state.
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