Weekly News (November 17, 2021)
This week’s Interest Rate (46th Week)
(By Fairway Home Loan)
|30 yr fx (%)||15 yr fx (%)||FHA (%)||10 yr Tr Y (%)|
|A year ago||2.750||2.375||2.625||0.878|
|A month ago||3.090||2.375||2.750||1.605|
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
- 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.
- 2022 Conventional loan limit: Conforming SFR : $625,000/ Conforming high balance: $937,500/ Confirming 2 Family: $702,000/ Conforming High Balance: $1,053,000
Alpine, NY still among priciest towns in U.S.
- Homes in Alpine’s ZIP code of 07620 have fetched a median sales price of $2M so far this year, according to PropertyShark, the real estate data provider released its annual ranking Monday of the country’s 100 priciest ZIP codes.
- That made Alpine the 58th-most-expensoive ZIP code in the nation, which considered all residential transactions closed between Jan.1 and Oct.22. Alpine is extremely desirable to the luxury home buyer due to the large private properties, proximity to New York City, and the ability for children to attend top-rated schools (K-8).
- Short Hills in Essex County ranked #5 in NJ and Englewood Cliffs in Bergen County at #9.
- Still New Jersey pales in comparison with California real estate, according to PropertyShark’s data. At nearly $7.5M, Atherton, Cal’s 94027, in the San Francisco Bay area, retained the top spot for the fifth consecutive year. The Golden State ZIP codes account for 70% of the priciest housing markets, with 37% concentrated in bay Area alone.
NYC Rent Soaring Again
(Korea Daily 11/15)
- According to Elliman and Miller Samuel (Appraiser Co), the median rent in Manhattan rose 18% to $3,382, adjusted including free rent, compared to a year ago. It is a bit lower than pre-pandemic median rent($3,409), but increase rate is the highest for the last 10 years.
- Average rent incentive, which is number of free months, reduced to 1.7 months from 2.1 months. The vacancy rate is also reduced to 2.11% from 11.79% in Feb in 2021.
- Rent increase rate shows different aspects: rent increase with apartment with doorman increased 18.3% to $4,398, and rent increase with apartment without doorman rose 3.9% to $2,650. Median rent in NE Queens rose 8.2% to $2,612 and rent in Brooklyn dropped 1.2% to $2,731.
- Hochul has requested $1B of ERAP after the state depleted $2.4B EARP. Currently the state has ceased receiving application for ERAP as of 14th.
Foreign Students from Korea Down below 40,000.
(Korea Times 11/16)
- Korean foreign students in U.S. reduced to 39,491 which is 21% decrease from the last year while they were continually reduced for the last 10 years from 72,295 in 2011-2012.
- In the current school year(2020-2021), under graduate students reduced 24.2% to 17,743 from the last year while graduate students reduced 6.4% to 14,238. Non-degree programs such as language schools reduced 74.6% to 840. OPT status students reduced 15.3% to 6,670.
- Total foreign students in U.S. reduced 15% from year ago while only two countries like Korea(21%) and Saudi Arabia(29.2%) reduced more than 20%. Still China(317,299), India(167,582) and Korea( 39,491) are in order as top three countries. Economic effects of Korean foreign students are estimated as $1.993B.
- According to survey out of 860 higher education institutes, student enrollment for 2021 fall term increased 68% from a year ago while 2020 fall term has shown 46% decrease.
U.S. 3rd Qt Home Price rose 16%
(Korea Times 11/16)
- Home prices increase by double digits in more than 78% of U.S. area at 3rd Qt, compared to the same period last year. According to NAR, median home prices increase 16% to $363,700 while increase at 2nd Qt was 22.9%.
- Lawrence Yun mentioned that U.S. home prices increase in general, but the increase rate is slowing down.
- The average price for SFH rose $50,300 and the monthly mortgage payment still increased at 3rd Qt under historically low interest rates. Under the same condition, i.e., 20% down payment and 30-year fixed mortgage, monthly mortgage payment is $1,214 which is $156 more than a year ago.
Homes Now Sell In a Week: Forcing Buyers to Take Risks
- S. home buyers are having to pounce faster than ever to clinch a deal, forcing many of them to make snap decisions about what house to purchase and how much to pay.
- Home sales between July 2020 and June 2021 sat on the market for a median period of one week before going under contract, according to a survey released Thursday by the NAR. That is down from three weeks a year earlier and marks a record low in data going back in 1989.
- The pandemic helped spark the biggest housing boom in more than a decade. Buyers who kept their jobs sought more space to work remotely and took advantage of low mortgage-interest rates. At the same time, supply has been constrained. Caution about showing homes during Covid-19, a reluctance among some owners to enter the competitive housing market and the ability to refinance at low rates kept many prospective sellers from listing their homes.
- In such fast-moving market, buyers have little time to commit to one of the biggest purchases of their lives and sometimes forgo traditional safeguards. Many buyers have waived their rights to terminate a contract because of a low appraisal or unfavorable inspection to make their offers more competitive in a bidding war.
- Some buyers might also be eager to shop during the typically slow holiday season in hopes of facing less competition, said Mike Miedler, chief executive of C21 Real Estate LLC.
The Fed is Running Out of Excuses on Inflation
- Inflation hasn’t turned out to be temporary and has accelerated, reaching the highest in a single month since Jan 1990. It is high even when measured against pre-pandemic prices, so this isn’t merely catch-up for the deflation of last spring. It is no longer merely about Covid-disrupted supply chains, or demand for used cars and other popular items.
- The only explanation is that inflation will still be transitory – not as temporary as hoped, but that will go away on its own. Investors still buy the story, but the risk is rising that the Fed has to act more aggressively.
Americans dread rising inflation, but spend freely using Pandemic savings
- American consumers are dour about the economy, worried about inflation and pessimistic about the direction of the country in general. But none of that is keeping the from spending.
- Retail sales set a record on October, before adjusting for inflation, as shoppers splurged on electronics and home-improvement projects. Major retailers like Walmart are posting strong profits. And Wall Street forecasters are predicting a holiday season that looks less like pandemic-constrained 2020 than like 2019, when a strong labor market powered robust sales.
- But heavy spending, particularly on goods rather than services, is also contributing to the economy’s problems, intensifying supply-chain snarls and shipping delays. That, in turn, is pushing up prices: Inflation on October hit its highest annual rate in more than three decades. Consumers overall spent a record $638M at stores and restaurants in October, the Commerce Department said Tuesday, up 1.7% from September and 21% above pandemic levels.
- Unemployment has fallen to 4.6%, from close to 20% at the height of the pandemic, and wages are rising, particularly for low-income workers. Households are sitting on a collective $2.5T in savings built up during the pandemic – and, unlike last Christmas, when the pandemic reduced the appeal of browsing, fitting rooms and lingering indoors, many Americans feel comfortable going out and spending.
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