Weekly News (May 25, 2022)
Interest Rate (21st Week)
(By Fairway Home Loan )
| 30 yr fx
| 15 yr fx
|10 yr Tr Y
|5 Yr Arm
|7 Yr Arm
|A year ago||2.875||2.250||2.490||1.576|
|A month ago||5.250||4.999||4.875||2.915|
Prime Rate:3.75 – 4.00% / Fed Fund Rate: 0.75- 1.00% .
- 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
Conforming 2 Family: $828,700/ Conforming High Balance: $1,243,050
Mayor Chung of Palisades Park failed to remove D. Lorenzo
( Korea Times 5/25 )
- Mayor Chung, who is a candidate of Mayor for the next term, proposed to terminate the Borough Administrator, David Lorenzo through the council meeting because the budget overhead was too big.
- The council member, Stephanie Jang and JK Park were eliminated from the vote because the town lawyer suggested they have a conflict of interests with David Lorenzo.
- The remaining four council members voted against the proposal and the Mayor Chung failed to remove the David Lorenzo.
Tech Companies and Banks Lead Exodus from Midtown
( WSJ 5/25 )
- Companies are bypassing prime blocks in Midtown Manhattan for neighborhoods further west or downtown, as Park Avenue fades from prominence after decades as a magnet for some of the world’s biggest companies.
- With many employees preferring to work remotely or from home, companies are giving priority to state-of-art office towers with outdoor space and buildings in trendier neighborhoods in an effort to lure workers back to their desks.
- The result: More companies are shunning the older, staid office buildings that line the avenue for corporate Midtown for developing neighborhoods across town.
- Alphabet Inc’s Google paid $2.1B for its headquarters downtown near the Hudson River, while Facebook parent Meta Platforms now occupies four buildings south of Midtown. A number of financial forms, long pillars of Midtown corridors, are abandoning the area for more modern business districts.
- New York office occupancy is still below 40% of pre-pandemic levels, according to Kastle System, card swap security company. With many Midtown offices still empty, small businesses that rely on office workers are gravitating toward other neighborhood.
“Unimaginable” Jump In Rents Adds to Pressure on Adams
( NYT 5/25 )
- Shortly after becoming mayor of New York City, Eric Adams said he would roll out a “comprehensive housing plan” within a couple of weeks to tackle the rising housing costs and homelessness that have made the city an emblem of a growing national crisis.
- But four months later Mr. Adams has yet to make good on promises he made during his campaign and hasn’t dialed back at least one, prompting criticism over how strong a priority he has placed on a top issue for many New Yorkers.
- 1/3 – Fraction of households that spend more than 50% of their income on rent, according to a survey of New York City’s housing stock issued last week.
- 48,000 – Minimum number of people who slept in New York City shelters each night in March, according to the Coalition for the Homeless.
- $3,870 – The median effective Manhattan rent in April, more than 38% higher compared to a year before and the highest level ever recorded.
- Many places across the nation are grappling with housing affordability, and there is a growing recognition that a root cause is the shortage of available homes.
Rising Rates, Prices Coll Off Home Sales
( WSJ 5/20 )
- Rapidly rising mortgage rates and record home prices are cooling the U.S. hosing market, as April sales dropped for the their straight month fell to their weakest pace in nearly two years.
- Existing-home sales slipped 2.4% in April from the prior month, NAR said Thursday. Last month’s sales fell 5.9% from a year earlier.
- The figures are the latest sign that the frenzied market that took off in mid-2020 is losing much of its steam. Record-low mortgage-interest rates and home buyers’ desire for more space during the Covid-19 pandemic unleashed a sales boom that pushed home prices to new highs.
- Housing market still looks relatively hot by historical standards, and home-price growth remains robust. Prices rose 14.8% in April from a year earlier to $391,200, a record high in data going back to 1999, NAR said.
- But scarce inventory and mortgage rates topping 5% have combined with those steep prices to yank sales activity back to where it was before the boom. April’s seasonally adjusted annual rate of 5.61M was the lowest rate since June 2021. Lawrence Yun at NAR said “we are moving back to pre-pandemic sales activity”.
U.S. Retail Sales Climb Despite Inflation
( WSJ 5/18 )
- Americans continued to pump money into U.S. economy in April, with increased retail spending offering the latest sign consumers are driving demand at stores and manufactures despite the pinch from high inflation.
- Retail sales – a measure of spending at stores, online and in restaurants – rose a seasonally adjusted 0.9% last month compared with March. That marked the fourth straight month of higher retail spending.
- Another sign of economic momentum, the Fed said industrial production, a measure of factory, mining and utility output, increased a seasonally adjusted 1.1% in April – also a fourth month of gains.
- S. is also experiencing a historically tight labor market – with April marking the 12th straight month of solid job gains – adding to positive signs for the 2nd Qt performance by the U.S. economy.
Not all economic readings were positive on Tuesday. Supply disruptions related to the Covid-19 pandemic have weighed on parts of economy since last year, including residential buildings. A gauge of home builder sentiment dropped in May for the fifth straight month to the lowest reading since June 2020, amid rising building materials costs and interest rates.
Amazon to sublease warehouse as online shopping slows
( Record 5/25 )
- Amazon is planning to sublease some of its warehouse space now that the pandemic-fueled surge in online shopping, which helped the e-commerce giant rake in soaring profits in the past two years, has eased.
- Bloomberg News and the WSJ reported earlier that the retailer would sublease at least 10M sf of space and could end more of its leases in states including New York, New Jersey and California.
- Seattle-based Amazon doubled the size of its operation during the pandemic, adding more warehouses and workers to keep up with demand from homebound consumers who felt more comfortable buying things online.
- But as the worst of the pandemic eased, it found itself with too much warehouse space and too many workers.
Fed Takes on Hot Housing Sector
( WSJ 5/25 )
- When the Fed set out to cool the economy and slow inflation in the past, it counted on the housing market to do much of the work. By raising interest rates, the central bank made mortgages more expensive and trimmed the number of buyers.
- This time, America’s red hot housing market threatens to make the Fed’s job tougher. With so many buyers competing for so few available properties, home prices in the U.S. rose 18.8% rise in last year in major metropolitan areas.
- Mortgage rates have risen almost 2.3% since November to 5.25% last week, the steepest rise in a six-month-span in decades. In the past, that kind of increase was usually enough for home buying and construction to fall sharply.
- Yet prices could still hit new highs, even with sales starting to fall. Economists at Goldman Sachs estimate housing prices will grow around 10% this year: Bank of America forecast 15%.
- That leaves the Fed to decide how far and how fast rates need to go up to make a dent in the housing market without triggering a economic slowdown.
- Home builders have increased production but are hamstrung by volatile material costs, supply-chain troubles and shortage of skilled trade people and available land.
- Home owners who refinanced their mortgages at ultralow rates have less incentives to sell, also crimping supply.
Others/Tech News: Walmart expanding Drone Delivery
- Will be able to deliver more than 1M packages by drone a year in as little as 30 min at $3.99 delivery fee up to 10 lb. at a time.
- Available in Arizona, Arkansas, Texas, Florida, Utah and Virginia.
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