Weekly News (July 7, 2021)

This week’s Interest Rate (27th Week)

(By Fairway Home Loan )

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

• Potential home buyer — Have a pre-approval first before the shop.  Now we have 48hour underwriting turn-around times for regular loans.
• 2021 Conventional loan limit:
  Conforming SFR : $548,250/ Conforming high balance: $882,375
  Confirming 2 Family: $702,000/ Confirming High Balance: $1,053,000

NY State provides Rent Assistance program to 119,209 Renters

(Korea Daily  7/7)

• The total of 119,209 renters have applied for the 2nd Emergency rental Assistance Program in NY.  Most of them (91,457) live in NYC.  The State has processed 109,000 applications last year from 7/16/2020 as the 1st round.
• NYC has the total of 2.2M renters.  Among them, 20% last year and 11% this year has been affected by the pandemic due to unemployment.
• If they are approved, they will receive up to 12 months’ rent and utilities.
• http://otda.ny.gov/programs/Emergency-Tental_Assistance/

Safety fears Rattle Florida’s Condo Market

(NYT   7/7 )

• The partial collapse on June 24 of Champion Towers South in Surfside, FL has led some owners and potential buyers to reassess the appeal of older beachside condos and high-rise buildings in the area, creating uncertainty in otherwise scorching housing market in South Florida.
• At least a half of Champion Towers South, a 13-story, 136 units complex, crumbled in the middle of the night, killing at least 32 people and touching off a desperate search for more than 100 others who remain missing.
• Cordelia Anderson, a Miami real estate agent, said five clients who has been looking at units in older condo buildings asked for hefty discounts after the collapse, or abandoned the coast and instead wanted to search inland.
• In Miami-Dade county, condos costing $1M or more have seen a surge in demand this year, with a 300% boost in sales from January through May over the same period last year, a broker and founder of Analytics Miami. Condos costing less than a $1M saw a 92% increase from last year.
• Jesse Keenan, a professor at Tulane University said those sites have had to reckon with the added costs of living in a coastal environment, like shifting sediment, subsidence and corrosive effect of saltwater. “This is the first generation in the post war period, thinking that we can engineer around the force of nature”.

Baby boomer generation starts inherit $35T assets to the next generation

(Korea Daily  7/3)

• US Baby boomers (1946-1964) over 70 years old, is facing “The biggest asset transfer” in history, said WSJ on Friday (7/2).  FRB said their total assets reached to $35T which is 27% of total US assets which was increased by 20% compared to 30 years ago.  Also their assets are 157% of US total GDP, which is doubled compare to 30 years ago.
• A consulting company, S Associates forecasted this Older generation will inherit the total of $70T between 2018 – 2042, and $61T assets of that will be inherited to X generation (1965 – 1980) and M generation (1981 – 1996).
• This Older gen’s asset was accumulated mainly by US economic growth after the WW II, Tax decrease for high income family, asset increase of real estate and stocks, said WSJ.

FRB said Interest rate increase might happen toward the end of 2022

(Korean Daily   7/2)

• IMF announced Thursday (7/1) that US FRB might start “tapering” at the 2nd half of 2022 and rate increase toward the end of 2022 or the beginning of 2023, by observing the current inflation rate which is over the longtime goal due to US government’s spending expansion.
• UK Financial Times also forecasted FRB might increase the interest rate at least twice till the end of 2023.

US Unemployment Claims Reach New Pandemic Law

(WSJ    7/2)

• Workers filing for jobless benefits fell to a new pandemic low last week and resumed a monthlong downward trend, adding to signs of a recovering labor market.
• Initial jobless claims fell by 51,000 to a seasonally adjusted 364,000 in the week ended June 26 from the prior week’s revised total of 415,000, the Labor Department said Thursday (7/1).
• Jobless claims, a proxy for layoffs, are down about 50% since the first week of April, but remain above pre-pandemic levels.
• The recovery has been uneven. While hiring has picked up, it has lagged behind gross domestic product growth as workers remain sidelined because of expanded unemployment benefits, child-care responsibilities and other factors.
• Supply-chain disruptions also continue to hobble business. Ford Motor Co. this week said the global computer-chip shortage will force it to cut output at more than half dozen US factories.

US Manufacturers Have Good Problems

(WSJ    7/2)

• Manufacturers are getting hit by supply-chain bottlenecks, struggling with parts shortages and rising materials prices, and having a hard time finding workers. But it shouldn’t let those things detract from the main story: Manufacturers are doing great.
• The institute for Supply Management on Thursday (7/1) said that its index of manufacturing activity came in 60.6 in June, down a bit from May’s 61.2 but still at historically high levels.  Anything over 50 signals expansion.
• The report’s employment index slipped, but that reflected manufacturers’ difficulty finding workers: They were hiring or attempting to hire, but many of them said they were having a hard time filling positions. Some manufacturers were experiencing more job turnover: workers are getting lured away by higher pay.
• For all that, struggling to keep up with demand is a good problem to have and far better than the alternative of having demand fall off sharply.

US Service sector grows slightly more slowly in June

(Record   7/7)

• Growth in the services sector, where most Americans work, slowed in June following record expansion in May.  The ISM said Tuesday that its monthly survey of service industries retreated to a reading of 60.1, following an all time high reading of 64 in May.
• It’s the 13th straight month of expansion in the services sector following a two-month contraction in April and May of last year as businesses were forced to shut down during the early stage of the coronavirus pandemic.

US Economy Growth shows the fastest growth since 1984

(Korea Daily    7/2)

• The CBO (Congressional Budget Office) report forecasted US GDP growth of 7.4% this year while the forecast was 3.7% in Feb. This growth was not expected by the federal government in the beginning of the year and the pace is the fastest growth since 1984.
• CBO said the government’s aggressive stimulus packages such as $1.9T total package including UI and cash support till September.  As more vaccinations are spreading widely, consumer spending is coming back strongly and unemployment rate is improving which will come down below 4% in 2022 and it will stay tis levels for a while.

Others/Tech News: Manicure Robots developed by 3 start-up companies

• The companies, Nimble, Clock-work, Coral use AI and Computer vision technologies.
• Manicure Robot price : $250-$400
• They might change $10B nail salon market.