Weekly News (December 29, 2021)

This week’s Interest Rate (52nd  Week)

(By Fairway Home Loan )

 Prime Rate:3.0% / Ref IR: 0.00- 0.25% 

• 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.
• 2022 Conventional loan limit: Conforming SFR : $647,200.00/ Conforming high balance: $970,800.00 / Confirming 2 Family: $702,000/ Conforming High Balance: $1,053,000

New Jersey Eviction Moratorium will be ended at the end of this year

(Korea Times     12/29 )

• The moratorium has started March 2020 and about 350,000 tenants has been protected so far. Gov. Murphy has no intention to extend it further. The landlord can file the eviction from the New Year if the tenant doesn’t pay the rent or late.
• The ERAP application also has been ended on 12/15 in New Jersey, but Bergen County still is receiving the rent assistant program application via co.bergen.nj.us/erap

New Jersey minimum wage set to $13.00 from the New year

(Korea Daily     12/29 )

• New Jersey has decided $13.00 the minimum wage per hour from 1/1/2022. It will be $14.00 from 1/1/2023 and it will be $15.00 from 1/1/2024.
• For seasonal employers and micro-business employers under 6 employees, the minimum wage is $11.90 per hour. For those employees with tips like restaurants it will be $5.13 per hour, but those who gets smaller tips will receive the difference between the money they get and $13.00.

US Home prices surge 18.4% in October

(Record/Korea Times  12/29  )

• S. home prices surged again in October as the housing market continues to boom in the wake of last year’s coronavirus recession. The S&P CoreLogic Case-Shiller 20-city home price index, out Tuesday, climbed 18.4% in October from a year earlier.
• The gain marked a slight deceleration for two consecutive months while it was 19.8% in August and 19.1%but was about in line with what economists had been expecting.
• All 20 cities posted double-digit annual gains. The hottest markets were Phoenix(up 32.2%), Tampa, Florida(28.1%), and Miami(25.7%). Minneapolis and Chicago posted the smaller increases, 11.5%.
• Housing market has been strong thanks to rock-bottom mortgage rates, a limited supply of homes on the market and pent-up demand from consumers locked in the last year by the coronavirus pandemic.
• As housing costs eat up a larger share of home purchaser’s paychecks, buyers will get creative. Many will take advantage of ongoing workplace flexibility to move to the suburbs, where, despite home prices gains, many can still find a lower price for square foot that nearby cities.
• The median existing home sale price in November rose 13.9% from a year earlier to $353,900, NAR said earlier this month.

New Home Sales soaring

(Korea Times 12/27 )

• According to Dept of Commerce reports on 23th, new home sales in November rose 12.4%, compared to a year ago, to 744,000 which is the highest since April, 2021. Also new home prices rose 14.1% to $416,900, compared to year earlier.
• Experts said the main reason is super low interest rates. Employment has reached to near perfect employment level and savings has been increased during the pandemic era.

Is Real Estate in Your retirement Portfolio?

(WSJ   12/24 )

• Whether it is a physical property, such as an apartment building, or an investment in a real estate investment trust or mutual fund, many financial-planning professionals say that income=producing real estate is an essential part of a well-parforming retirement portfolio.
• However, while 75% of retirees have their money parked in bank accounts or CDs, just 12% own real estate other than their primary residence for investment, according to a survey conducted by the Transamerica Center for retirement Studies between Nov 2020 and Dec 2020.
• “In our research, we found that portfolio that have a mixture of stocks, bonds and real estate outperform other portfolios,” said Ken. Johnson Ph.D a real estate economist at FAU(Florida Atlantic University). Dr. Johnson said the “optimal mix” in a portfolio is 50% real estate, 30% stocks, and 20% bonds. This formula, he said, would be considered sufficiently diversified to provide stability in retirement.
• A diversified portfolio between both product type and geographic area will have a smoother ride through the ups and downs that occur through the economic cycle, said Michael Silver, a certified financial planner in Boca Raton, FL.

Further Price Increases Expected Across a Range of Foods in 2022

(WSJ   12/28 )

• Everything from coffee to mustard is getting more expensive next year. Many food manufacturer say they plan to raise prices in 2020 for a range of products from macaroni-and-cheese to snacks, the latest sign that consumers will continue to face higher costs at the supermarket.
• Food prices are estimated to rise 5% in the first half of 2022, according to research firm IRI, thought the level of increases will vary grocers and regions.
• The Labor Dept said the consumer-price index rose 6.8% in November from a year ago, the fastest pace since 1982. The food-at-home index, which incudes purchase from grocery stores, rose 6.4% over the past 12 months, with meats, poultry, fish and eggs increasing 12.8%.
• Consumers remain willing to spend on groceries even as prices rise, some companies say, though that is starting to change. As shoppers become more price-sensitive, they are buying cheaper versions of meat and cooking oil, among others, industry executives said. Supermarkets say they are taking various approaches to combat price increases as consumers react to prices, including discounting certain items.

REITs Climbed Higher in 2021, But Next year May be Volatile

(   WSJ   12/29  )

• Investors who bet on real-estate investment trusts at the beginning of 2021 are reaching for top-shelf champagne as they prepare to celebrate the New Year. They can afford to splurge. The FTSE NAREIT Equity REITs index was up 36% in 2021, compared with 26% for the S&P 500 as of Dec 23, according to Green Street.
• Next year it is doubtful this year’s momentum can be maintained. Concerns about the Omicron variant of the Covid-19 virus already are dumping hopes that millions of people who have been working form home throughout the pandemic will return to offices in January.
• REITs shares, like those of numerous other companies, also could face a bumpy ride in 2020 from inflation and rising interest rates.
• Total returns of industrial REITs have been over 40% since the pandemic hit because of the rise of online retail sales. Total returns of self-storage landlords have increased more than 80% during that same time frame as people working from home have decluttered.
• REITs that own properties like office buildings, malls, senior housing and hotels that depend on business travel have been tracking the ups and downs of the pandemic since early 2020. Their stocks have tumbled when new variants have appeared and soared with promising news about vaccines.
• Many investors consider real estate an inflation hedge because owners can raise rents to stay ahead of or at least keep pace with rising prices. But inflation may be painful for highly leveraged property owners next year if it sparks sharply higher interest-rate costs.

Daily Average of US Coronavirus cases, over 267,000, sets a record

(NYT   12/29 )

• The U.S. record for daily coronavirus cases has been broken, as two highly he U.S. into contagious variants – Delta, Omicron – have converged to disrupt holiday travel and gatherings, deplete hospital staffs and plunge the U.S. into another long winter.
• As the 3^rd year of the pandemic loomed, the seven-day average of the U.S. cases topped 267,900 on Tuesday, according to NYT database.
• The previous U.S. daily cases record was set on Jan/ 11, when the seven-day average was 251,232. That was during catastrophic winter that was far worse than this time, when over 62% of Americans are fully vaccinated.
• Hospitalization have been rising, averaging more than 71,000 daily, but remain far below peak levels. While deaths have also been increasing, daily average of 1,243 is a fraction of the record 3,342 reported on Jan 26.
• Records are also being broken in Europe, but so far leaders Britain, France, Spain, and some other countries have resisted imposing harsh new restrictions. The U.S. has taken a similar path, as president Biden repeatedly said the era of lockdowns is over and promised to increase testing, double down on vaccination campaigns and prop up hospitals.  Omicron is hitting the U.S. Mid-Atlantic region especially hard. Washington, Maryland and Virginia all broke records for daily case counts on Monday.