Weekly News (May 3, 2023)

Mortgage Interest Rates Review

(Fairway Home Loan 5/3/2023)

 Federal Fund Rate: 4.75% -5.00%        Prime Rate: 7.75%-8.00%

 “Exodus from New York” reduces state income: “탈뉴욕”에 뉴욕주 총소득 팬데믹이후 급감 

(Korea Daily     5/3/23)

• After the Pandemic, as NY population decreased, the state (AGI)adjusted gross income reduced by $24.5B in 2021, according to IRS.
• AGI reduced by $9B in 2019 and $19.5B in 2020, respectively.
• In contrast, Florida AGI increased sharply by $17.7B in 2019, $$23.7B in 2020, $39.2B in 2021 respectively.
• WSJ said the reasons of the Exodus are 1) high tax rate and 2) high income earners think the increased social benefits to newly immigrated residents makes high tax, and leave the state.

Korean Foreign Students in US increased 6.5%: 미국 내 한인 유학생 6.5% 증가

(Korea Daily   4/29/23)

• According to ICE report on 28th, Korean students in US with F-1 and M-1 visa increased 6.5% to 62,617 in 2022 while it was 58,787 in 2021.
• Foreign students in total in US are 1,362,157 up by 10.1%, compared to 1,236,748 in the previous year.
• Chinese foreign students are 321,196 :Ranking #1, but it was decreased 7.11%. The 2nd place is Indian students : 64,570, increased by 27.8%. The 3rd place is Korean students.

Woes Swell for Commercial Property: 상업용 건물에 대한 걱정이 부풀어

(WSJ  4/25/23)

• Landlords are contending simultaneously with a cyclical market downturn and with changes in the way people work, live and shop. The sudden surge in interest rates caused property values to fall, while the increases in remote work and e-commerce are reducing demand for office and retail space.
• The U.S. office vacancy rate reached a milestone in the first quarter when it rose to 12.9%, exceeding the peak vacancy rate during the 2008 financial crisis. Despite low unemployment, that figure marked the highest vacancy rate since data firm CoStar Group Inc. began tracking it in 2000.

U.S. commercial real-estate price index

Bruised Home-selling Market Shows Signs of Life:  상처투성인 주택 판매가 살아있음을 보이기

(WSJ   4/25/23)

• Last week, NAR reported that 4.44 million existing homes were sold in March at an annual rate. That was down from February’s 4.55 million and far below the 5.69 million in March 2022. But over the three-month period ended in January, the monthly average was 4.05 million. Also, NAR said that the median price on an existing single-family home was down 1.4% in March from a year ago.
• A lack of inventory remains a problem, but the number of homes on the market appears to have improved. Realtor.comreported that during the week ended April 15, the number of homes listed for sale was 49% above the year-earlier level. Commerce Department figures show there is also a large number of multifamily buildings under construction which, as they are completed and come on the market, should boost housing availability.

Multifamily under construction

Market For New Homes Rebounds: 미 신축 주택 시장 재개

• Home builders are enjoying stronger-than-expected business this spring, capitalizing on the recent fall in mortgage rates and the shortage of existing homes for sale.
• Newly built homes made up about one-third of single-family homes for sale in March, according to data from the Commerce Dept. and NAR. The proportion of newly built homes reached nearly 35% in December, a record in data going back to mid-1982 and up from a historical norm of 10% to 20%.
• Buyers also are more comfortable now that mortgage rates have come down from the 20-year highs they hit in the fall, topped 7%.The average rate for a 30-year fixed mortgage was 6.43% in the week ended April 27, according to Freddie Mac.

New single-family homes as a share of all single-family homes for sale

Economy Cools Amid Recession Fears: 불황의 두려움에 미국 경기 하강

(WSJ  4/28/23)

• U.S. economic growth slipped in the first quarter in the midst of still-high inflation and rising interest rates, adding to worries about a possible recession later this year.
• GDP rose at an inflation- adjusted and seasonally adjusted 1.1% annual rate from January to March, a significant slowdown from 2.6% growth in the fourth quarter, the Commerce Dept. said Thursday.
• Consumption—the main driver of the economy—was a bright spot. Consumers propped up growth with a surge of buying early in the year, fueled by an ability to spend from higher incomes and built-up savings. That trend has since abated, however.

Businesses pulled back sharply, drawing down inventories, cutting equipment purchases and reducing housing investment.

• The housing market, sensitive to rising interest rates, continued to be a drag on the economy. Residential investment declined 4.2% in the first quarter, but that came after two quarters of much larger declines.

Economy Cools Amid Recession Fears: 불황의 두려움에 미국 경기 하강

(WSJ   4/28/2023)

• Businesses pulled back sharply, drawing down inventories, cutting equipment purchases and reducing housing investment.
• The housing market, sensitive to rising interest rates, continued to be a drag on the economy. Residential investment declined 4.2% in the first quarter, but that came after two quarters of much larger declines.

Annualized quarterly change in U.S. GDP

Fed Set to Raise Interest rates to Highest Level in 16 years:

미 준비위원회, 16년만에 가장 높은 이자률로

(WSJ  5/3/23)

• Federal Reserve officials are on track to increase interest rates again at their meeting this week while deliberating whether that will be enough to then pause the fastest rate-raising cycle in 40 years.
• Another quarter-percentage point increase would lift the benchmark federal-funds rate to a 16-year high. The Fed began raising rates from near zero in March 2022.
• Until now, officials have been looking for clear signs of a slowdown and easing inflation to justify an end to rate increases. But after this week, the Fed’s calculations could flip. Officials could need to see signs of stronger-than-expected growth, hiring, and inflation to continue raising rates.