Weekly News (May 24, 2023)
Mortgage Interest Rates Review
(Fairway Home Loan 5/24/2023)
|30 yr fx (%)||15 yr fx (%)||FHA (%)||10 yr Tr Y (%)||5 yr Arm (%)||7 yr Arm (%)|
|A year ago||5.250||4.250||4.750||2.724||4.500||4.750|
|A month ago||6.250||5.750||6.250||3.433||6.250||6.250|
Federal Fund Rate: 4.75% -5.25% Prime Rate: 8.00%-8.25%
Mayor Kim ordered investigation on Palisades Park Police Dept: 팔팍 경찰정치 개입 특별조사 한다
(Korea Times 5/24/23)
- Mayor Kim mentioned that discussion between Pal Park Councilman and an attorney about HR matters of police dept. in Feb is a serious matter ad he initiated the special investigation and town council meeting voted for it.
- Also there is an accusation that town administrator was involved with police HR matter and an urgency to investigate the matter as well such as the former mayor James Rotundo’s son was promoted to the captain under this accusation for police dept.
- “Team Pal Park”, a non-profit organization, had a demonstration against politician’s involvement with the operation of police dept, and the chairperson, Mr. Won welcomed mayor’s Kim intention to clean up the issues, but there should be a practical solution to achieve.
Korean Rich & Famous purchased properties in U.S: 한국 “큰 손”들, 미국 부동산 매입 “붐”
(Korea Times 5/11/23)
- Starting with Mr. Na with H Investment Consultant purchased a 36-hole golf club in Cal at $25M right before his stock price plummeted, Mr. Bang at Hive ( BTS management Co) purchased $26.4M house in Bel Air, CA. Mr. Jung, Vice Chair at ShinSeGe purchased $19.2M in 2021.
- During the pandemic, Korean have purchased 2,455 properties in U.S. in 2021 and the total amount increased 54% by $210M from a year ago. Among these purchases, investment purpose takes 76%. According to Korean law, properties in foreign country is not counted and U.S. tax law is simple and only the property tax is increased relatively by small amount.
- Mr. Jung at HyunDai Motors purchased a HudsonYard condo at $4.97M. Mother of Samsung Chairperson, Mr. Lee purchased $21.25M in Hawaii.
Residential Construction increase 2.2% in April: 4월 주택 착공 2.2% 상승
(Korea Times 5/17/23)
- Commerce Dept announced that residential new construction increased 2.2% in April, U.S. to annual rate 1.4M homes while residential permits declined 1.5% to 1.42M homes, compared to the last month.
- Also NAHB and Wells Fargo announced over 50 HMI index which indicates residential market renounced. ( Over 50 HMI index shows a good standing)
Home Sales Drop 23% on Year, Prices Slip: 주택 거래 1년 대비 23% 감소하면서 주택가도 하강
- U.S. existing-home sales, which make up most of the housing market, fell 3.4% in April from the prior month to a seasonally adjusted annual rate of 4.28 million, NAR said Thursday. April sales fell 23.2% from a year earlier by the most in more than 11 years.
- The national median existing- home price fell 1.7% in April from a year earlier to $388,800, the biggest year-over year price decline since January 2012, NAR said. Home prices have fallen the most in the Western half of the U.S., while prices continue to rise from a year earlier in many Eastern markets.
- Falling home sales come as the economy shows signs of cooling. Economic growth eased in the first quarter and many economists expect a further slowdown this year.
U.S. median existing-home price, change from a year earlier
In the Housing Market, the key is Timing: 주택시장에서 사고 파는 시점이 중요
- ANYONE ON THE HUNT for a new house lately has learned a hard truth about real estate: The only thing more important than location is timing.
- “The real financial winners were the pandemic home buyers who locked into mortgage rates around 2 to 3%,” said many economists. The average rate for a 30-year fixed-rate mortgage is currently 6.39%, according to Freddie Mac. The typical monthly payment on a median-priced existing single-family home nearly doubled in two years, rising to $1,933 in June 2022 from $1,033 in June 2020, according to NAR.
- Americans still have more faith in real estate than any other investment. Some 34% rated it the best long-term investment in a recent Gallup survey, down from 41% in 2021 and 45% in 2022.
Home buyers’ purchasing power & Average rate on a 30-year fized mortgage
A Housing Bust Comes for Small-Time Investors : 주택 경기 침체가 소규모 투자자들까지도 피해
- Gajavelli’s (61 year old, former IT engineer) company owned more than $500 million worth of Sunbelt apartment buildings with more than 7,000 units, and was one of Houston’s biggest landlords.
- Over the past four years, Gajavelli built his real-estate empire using funds from dozens of small investors who wanted a chance to earn passive income. He pitched double-your-money returns in ebullient, can-do talks at investor conferences and on YouTube videos.
- In April, Gajavelli’s company lost more than 3,000 apartments at four rental complexes taken in foreclosure, one of the biggest commercial real-estate blowups since the financial crisis. Investors lost millions.
- His company had taken out commercial real-estate loans that carried floating interest rates and were adjusted each month. Those types of loans in 2021 offered initial rates as low as 3.5%. Everything changed when the Federal Reserve began raising rates last year, driving up monthly loan payments. Inflation contributed to higher expenses, and apartments couldn’t raise rents fast enough to keep pace. After bills went unpaid, company properties went into foreclosure.
Walmart Has Mixed Blessing in Inflation: 월마트는 인풀레이션 아래에서 복합적으로 이득
- Walmart said sales in the U.S. rose 7.4% in its quarter ended April 28 compared with a year earlier, beating its earlier guidance of 4.5% to 5%.
- Impressively, e-commerce growth for Walmart U.S. was 27% on-year, much higher than the 16% growth Wall Street analysts anticipated. And although online sales have tended to be lower margin, consolidated operating income— which includes Sam’s Club and international operations—rose 17.3% compared with a year earlier, roughly double the growth rate logged for net sales.
- Inflation’s squeeze on shoppers has served Walmart well so far. The company said it continued gaining market share in groceries, including among higher-income and younger shoppers.
Walmart’s U.S. e-Commerce growth & net sales and operation income