Weekly News (July 26, 2023)

Mortgage Interest Rates Review

Fairway Asset Corp. 7/26/2023

Federal Fund Rate: 5.00% -5.25%        Prime Rate: 8.00%-8.25%

Online Fraud on RE Transaction increase sharply

Korea Daily   7/22/23

온라인 부동산 거래 사기  급증

• After the pandemic era, as online real estate transaction becomes popular, fraudulent online transactions increase sharply.

• They upload very attractive photos/video of the house in order to lure potential buyers who are afraid to lose the opportunity to bid. After potential buyer sends the deposit money, they communicate through K Talk account and use the third party’s bank account. After the deposit money paid, they stop communicating or somebody else lives in that house if potential buyers visit the house.
• To avoid online fraud : 1. Request real time video showing 2. buyer and seller can hire a professional to write a contract (transaction broker) 3. check agent’s profile on the company website.

Home Sales Fall as Rates Chill Market

WSJ  7/19/2023

이자률이 시장을 식히면서 주택거래가 감소

• Higher interest costs deter buyers, sellers, but limited inventory is propping up prices. Frustrated home shoppers face high mortgage rates and a shortage of available properties, a combination that made purchases less affordable and dented sales in June.
• Existing-home sales, which make up most of the housing market, decreased 3.3% in June from the prior month to a seasonally adjusted annual rate of 4.16 million, NAR said Thursday. That was the slowest sales pace since January. June sales fell 18.9% from a year earlier.
• Nationally, there were 1.08 million homes for sale or under contract at the end of June, unchanged from May and down 13.6% from June 2022, NAR said.

U.S. existing-home sales by region

WSJ 7/21/2023

Prices of Homes Fall From Year Earlier

WSJ   7/26/23

주택 가격 1년전 비교, 하락

• Home prices fell from a year earlier in May, for the second straight month, as elevated mortgage rates and still-high home prices sidelined buyers.
• The S& P CoreLogic Case-Shiller National Home Price Index fell 0.5% in May, compared with a 0.1% decrease the prior month. The annual decline was the largest since 2012.
• The median existing-home sale price fell 0.9% in June from a year earlier to $410,200, according to NAR.
• The Case-Shiller 10-city index fell 1% over the year ended in May, following a 1.1% decline in April. The 20-city index fell 1.7%, unchanged from April.

CoreLogic Home Index

WSJ  7/26/23

Housing’s Recession Already Happened

WSJ   7/21/23

 주택 불황은  이미 지나간것…

• A lot of people still expect the U.S. to fall into a recession. But for the housing market, the recession could be in the rearview mirror. NAHB on Tuesday reported that its index of industry sentiment rose to 56 in July from 55 a month earlier —still a depressed reading, but up from the low of 31 recorded in December, and the highest level since June last year.
• The Commerce Dept. reported the second-quarter construction starts hit the average to 1.45 million up from the first quarter’s 1.39 million homes started, marking the first quarterly increase since the beginning of last year.
• Meanwhile, whenD.R. Horton reported results for its fiscal third quarter ended June 30 on Thursday, the company sounded downright upbeat. Beyond handily beating analysts’ estimates, the nation’s largest builder said it expects to close on 82,800 to 83,300 homes in the fiscal year ending in September, up from its previous forecast of 77,000 to 80,000.

Rising Demand Lifts New Homes

WSJ    7/20/23

주택 수요 상승이 신축 시장을 부추겨

• High mortgage rates dissuade sellers of existing houses, giving builders a lifeline.
• Only 1.08 million existing homes were for sale or under contract at the end of May, the lowest level for that month in NAR data going back to 1999.
• For many would-be buyers— in Utah and in many other markets—new construction has become the only game in town. Newly built homes accounted for nearly one-third of single-family homes for sale nationwide in May, compared with a historical norm of 10% to 20%.

New Home share of all-single family homes for sale

WSJ 7/20/23

Foreign Firms Get Most U.S. Climate Incentives

WSJ   7/21/23

대다수 미국 환경 자금, 외국 기업이 혜택

• The 2022 climate law unleashed a torrent of government subsidies to help the U.S. build clean-energy industries. The biggest beneficiaries so far are foreign companies.
• The Inflation Reduction Act has spurred nearly $110 billion in U.S. clean-energy projects since it passed almost a year ago.
• Companies based overseas, largely from South Korea, Japan and China, are involved in projects accounting for more than 60% of that spending. Fifteen of the 20 largest such investments, nearly all in battery factories, involve foreign businesses, the Journal’s analysis shows.
• Forecasters estimate the climate law could unleash some $3 trillion in total clean-energy investments over the next decade.

IRA announced spending on clean-energy projects

WSJ 7/21/23

EV and Battery-plant investment and Share-price

WSJ 7/21/2023

Bank Regulators Urge Flexibility In Loan Workouts

WSJ   7/26/23

상업용 부동산 대출 불이행에 대한 준비 조치

• In a policy statement issued last month, the Fed, FDIC and other regulators gave banks a road map of how to extend and restructure loans without necessarily having to take losses.
• Banks can modify loans without taking a loss even if the properties backing them are worth less than the debt.
• The new guidelines, modeled on policy issued in 2009, come amid a profound slump for owners of office buildings, malls, apartments, warehouses and other commercial property. Over $1 trillion of loans backed by these assets will come due this year and next year, according to data firm Trep.

Very Possible to Raise 0.25%

Korea Daily/Times  7/26/23

연준, 오늘 0.25% 금리 인상 확실시

• Many experts forecast the Fed will raise 0.25% today at FOMC and will freeze the rate(5.5%), and possibly decrease the rate from March, 2024.
• If the Fed sees 3% inflation rate as a norm, then it is very feasible to embrace the soft landing of the U.S. economy.
• CPI came down to 3.0% increase last month rom 9.1% in June 2022.
• PCE went down to 3.8% increase, but Core PCE 4.6% increase.
• CPI measures the change in out-of-pocket expenditures of all urban households.
• PCE measures the change in goods and services consumed by all households and nonprofit institutions serving households.