Weekly News (January 12, 2022)
This week’s Interest Rate (2nd Week)
(By Fairway Home Loan)
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||2.699||2.375||2.490||1.177|
|A month ago||3.200||2.375||2.750||1.465|
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
- 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 / Confirming 2 Family: $828,700/ Conforming High Balance: $1,243,050
Palisades Park, NJ plans out Redevelopment on Broad Ave
(Kora Times 1/4 )
- Mayor Chung announced the plans for Redevelopment project on Broad Ave at the new year address which is the first time that the plan announced publicly.
- He said there is no detailed proposal, but there could be a need for lifting the current height limit to 2 story to begin with.
Manhattan Luxury Condo sales soring.
(Korea Daily 1/5 )
- WSJ reported on 4th that more than 1900 sales of over $4M priced condos have been made in 2021 in Manhattan, and the total transaction amount reached to $16B which was record since 2006 when they started collecting the relevant data.
- As foreigners are difficult to enter into the market due to the pandemic, domestic buyers were more active to purchase luxury condos with low interest rate mortgages and extra fund out of booming stock investments.
- Also they have need for more space for working from home and children’s staying more at home.
Rise in Yields Clips S&P, Blue Chips
(WSJ 1/12 )
- The 10-year is used as a proxy for mortgage rate. It’s also as a sign of investor sentiment about the economy. A rising yield indicates falling demand for Treasury bonds, which means investors prefer highest-risk, higher-reward investments.
- The choppy trading came as the yield on 10-year Treasury notes rose to 1.799% — its highest settlement level since January 2020, according to Treadeweb — from 1.769% on Friday. Bond yields move in the opposite direction from prices.
- Surging yields since the start of 2022 have sent a shudder through tech stocks. By selling bonds and sending yields higher, investors are indicating they believe the Fed could raise short-term interest rates in March and begin to shrink its holding of bonds and other assets soon after.
- Low rates helped fuel a huge rally in tech stocks last year, making bonds less attractive and spurring investors to buy risky assets. But as the Fed has pivoted to fighting inflation, tech stocks have lost some of their luster. The prospect of higher rates also reduces the value that investors see in the future cash flows of fast-growing tech companies, hurting their share price.
Surging home price is somewhat sentimental issue
(Korea Times 1/11 )
- Yale Professor, Robert Shiller who co-invented CoreLogic Case-Shiller index mentioned at the AEA annual meeting on 1/7 that surging home prices cannot be reasoned only low interest rates, but somewhat could be resulted from sentiment of home buyers – peer pressure and collective confidence. He also mentioned they are very difficult to do quantitative research, but he wants to recognize the existence of those factors. (He wrote a book, “ Narrative Economics”)
- He believes in a theory that attention-getting narratives – story telling and spreading like a virus spreading – drives those decisions and creates economic activities.
Property Funds Shift To Data Centers
(WSJ 1/12 )
- Real Estate investors are pulling cash out of offices and putting it into data centers as a hedge against the impact of remote working. But data centers have their own problems with oversupply and demanding tenants. Interest in data centers has been growing for years, but it took a big leap forward as the pandemic pushed more daily like online. One measure is acquisitions: Global data-center deals hit a record $47.1B in 2021, according to Synergy research Group, more than three times 2019’s tally and up from $34.5B in 2020. Blackstone bought QTS realty Trust for $10B including debt in June.
- Growth in digital activity underpin Wall Street’s appetite for the asset class. Global internet traffic increased by 48% in 2020 as office workers were forced to do their jobs from home, e-commerce boomed and millions turned to video streaming services as Netflix and online gaming. In 2021, growth in global internet traffic returned to more normal levels of 23%, according to the TeleGeography Global Internet Geography Research Service.
- The extra online activity has translated into strong demand for data storage. In the U.S., leasing in multitenant data centers in 2020 was more than three times higher than in 2019 by megawatt.
- Global demand for data storage should remain strong as more of the world’s consumer and corporate data moves to cloud storage.
U.S. Seven-Day Corona Case Average Tops 700,000
(WSJ 1/10 )
- The seven-day average for newly reported coronavirus cases in the U.S. topped 700,000 for the first time, data from Johns Hopkins Univ show, as the highly infectious Omicron variant spreads throughout the country.
- The number reported by the state health departments and collected by Johns Hopkins also likely reflect a fraction of the true number, due I part to Omicron’s rapid spread and the difficulty many Americans have had getting tested.
- There is growing evidence suggesting that Omicron is milder that other coronavirus variants that have fueled the Covid-19 pandemic, driving beliefs it will prove less lethal, too. Seven-day average of newly reported U.S has reached 1,600. Johns Hopkins data show, up from levels closer to 1,250 early last week.
- In hard-hit New York City, there are signs the pace of the case surge may at least be easing. Still the wave in cases is outing significant pressure on hospitals in the state.
(Korea Daily 1/12)
- According to Johns Hopkins, the seven-day average cases in NY are 57,865 while it was 132,093 a week earlier, which is down 56.2%. On 11th, coronavirus transmission rate is 18.6% while it was 30- 35% a week ago.
Models show Omicron may have peaked in US
(Record 1/12 )
- Omicron hit the U.S. hard and fast in the past month, but modeling by several universities shows the wave of infections may have crested – and hospitalizations and deaths should follow.
- Covid-19 infections peaked Jan 6, according to researchers at the Institute form Health Metrics and Evaluation at the University of Washington’s School of Medicine. “We peaked at 6.2M infections,” said professor of epidemiology and health metrics Ali Mokdad. That is close to estimates by the University of Texas, Austin Covid-19 Modeling Consortium, which outs the peak somewhere between Jan. 9 and 13. Mokdad’s group estimated that by Jan 3, at least 57% of Americans had Covid-19 at least once. The model resumes for every one reported case of Covid-129, there are five actual cases.
- Because hospitalization lag infections by about two weeks, the University of Washington team estimated the daily U.S. hospital census, including incidental admissions with Covid-19, will peak by Jan 25 at 270,000. Omicron has proved to be milder: 7 in 1,000 infections, or 0.7%, result in hospitalization, according to Mokdad’s group. The rate on Nov 4, while Delta was dominant strain, was 33 of every 1,000, or 3.3%.
- Reported deaths will rise to 1,930 per day by Jan. 24, the Washington team’s model predicts.
Powell Ready to Raise Rates, But Sees Supply Woes Easing
(WSJ 1/12 )
- Fed Chair Jerome Powell called high inflation a “sever threat” to a full economy recovery and said Tuesday the central bank was preparing to raise interest rates because the economy no longer needed emergency support.
- Powell said he was optimistic that supply-chain bottlenecks would ease this year to help bring down inflation as the Fed takes its foot off the gas pedal. But he told lawmakers at his Senate confirmation hearing that if inflation stayed elevated, the Fed was ready step on brakes. “If we have raise interest rates more over time, we will,” he said.
- He said nothing to push back against expectations that have firmed in interest-rate futures markets over the past week that the central bank would begin a cycle of rate increases in March.
Others/Tech News: SamSung bets that 2022 will finally be the year for folding Phones
- SamSung has 84% of the foldable market.
- Foldable smartphones represented $8.6M of last year’s total smartphone shipment of around $1.4B.