Weekly News (March 18, 2020)

This week’s Interest Rate (12th Week)

(Fairway Asset)
 30 Y Rate: 3.490%/ 15 Year Rate:3.375%/ 10 Y Treasury: 0.885%/  FHA:3.375%/  VA:3.375%
 Prime Rate:3.0% / Ref IR: 0.00- 0.25%

Fed Reserve lowered Reference Interest Rates by 1% to 0.00 – 0.25%

(The Korea Daily  3/17)

• Fed Reserve decided to lower Reference IR by 1% (Big Cut) to Zero Interest rates is on 3/15, and to release $700B to the market, which is called “Quantitative Easing” policy.  US Government will buy MBS(Mortgage backed security) and US treasury bonds.   Korea also lowered Reference rates to 0.00% which is the first time in history.  Japan decided to release about $75B to the market.
• Reference IR went back to same Zero Interest period in US which is the same as in Dec 2008.
• US stock market was not affected positively on Fed Reserve’s decision.
• COVID-19 situation in China and Korea is somewhat under control, but increasing rate in US, Italy, Spain, France, Germany, and Swiss becomes faster. COVID-19 positive cases are about 170,000 world wide.

Mortgage Interest rates went up by around 1% for some home mortgage program

(Fairway Asset, Time Mortgage  this week)

• Without clear understanding among mortgage community, mortgage interest rates went up by around 1% with some investment program for condos/town houses.  Primary single house cases keep the same low mortgage interest rates.
• Some under contract cases, waiting mortgage rates lock got hit and buyers would end up cancelling the contracts, or delayed closings.
• Mortgage broker communities would anticipate coming back to normal rates soon, hopefully within a few weeks.

Bergen County Executive order confused county residents on 3/16/2020 

(The Korea Times  3/18)

• County chief Tedesco announced the executive order of limiting access to all business in Bergen county on the night of 16th with effective date of 17th, 11:00 am, but next day morning on 17th it was delayed till Saturday (3/21) 8:00 am.
• The county has some issue with the State government that they did not inform/consult with the State.  According to this executive order, all businesses will be  closed down except food material stores, grocery with necessities, delivery/pick up restaurants, pharmacy, gas stations, mechanic shops with gas stations, attorney offices, banks, funeral houses, etc.
• More than 4 people gathering except family is prohibited, and curfew between 8:00 pm through 7:00 am which is longer than The State curfew time (8:00 pm to 5:00 am)
• There is some doubt that it will be executed or not because of some debate between the County and the State.

Mortgage Lenders weigh plan for payments pause 

(NYT 3/18)

• Businesses across the country have ground to a halt because of the COVID-19 outbreak, leaving millions of Americans wondering how they will make their next mortgage payments.
• A broad group of bankers and other mortgage industry participants is working on a plan to offer a pause in payments on home loans, according to Housing Policy Council, a trade group that includes Citigroup, Wells Fargo, JP Morgan Chase and Quicken Loans.
• The Federal Housing Finance Agency, which overseas Fannie Mae and Freddie Mac, the two government-run agencies that guarantees in the US, is under mounting pressure to make sure their borrowers don’t lose their homes if they start missing payments.

Gen Z is getting into Residential market and growing fast

(The MIJU  3/14)

• Gen Z buyer, born in between 1995 and 2010 took 2% in 4th Qt 2019, according to Realtor.com.  Their average price for buying is $160,000 while Gen M average price is $256,500.
• Gen Z is called “truly digital generation” through Internet, social network, and mobile systems.  They have experienced digital technology from their birth. In other words, they have not experienced the world without digital technology.  Even though they do not communicate within a country, but they do communicate well in the same generation globally.  In Brazil, gen Z takes about 20% of while population.
• Gen Z has strong tendency to try to process everything through on-line from the beginning to the end. They emphasize creativity and communities.

On-line Petition has been launched for exemption of 2 month Rent/Mortgage

(The  Korea Times  3/18)

• “Rent Strike 2020” petition via Google is being sent to the NY Governor Cuomo, asking exemption of 2 month rent/mortgage/utilities because of COVID-19 situation in New York.
• Many labor workers are in trouble due to not being able to work outside and many businesses are under stress.

Every Adult in US will get $1000 in order to reduce impact of COVID-19?

( The Korea Daily  3/18)

• rump Admin is planning to give out $1000 cash to all Americans in order to absorb the shock of COVID-19.  The plan under consideration is to send $1000 check to all adults in 2 weeks, exception of rich people.
• Also Trump mentioned payroll tax exemption is under consideration, but it will take longer.
• On top of these plans, President Trump is researching the idea of spending $850B to boost US economy under COVID-19 situation.

Other/Tech News :  NY Stock DOW index increased by 1000p

   -Market is noticing US Government’s strong approach to cure  the COVID-19 situation.