Weekly News (October 25, 2023)

Mortgage Interest Rates Review

United Mortgage Nation  10/25/2023

Federal Fund Rate: 5.25% -5.50%        Prime Rate: 8.25%-8.50%

NY/NJ, Korean Population reduced

뉴욕,뉴저지 한인 동포 줄었다

Korea Daily 10/20/2023

• Overseas Korean Service Support Center(해외 동포청) announced on 19th that Korean Population in tri-state – NY/NJ/CT is 304,459 while it was 360,053 in 2020, which was 15.4% down.
• Korean Government said it is probably because of the pandemic and general economic situation.
• In NY Korean population reduced 19% to 170,242 from 2021. In NJ, Korean population reduced 9.2% to 133,307, and CT reduced 25% to 13,911.
• In U.S. other cities, LA has about 660,000 /Chicago has about 340,000 / NY has about 300,000 /San Francisco has about 280,000 / Atlanta has about 260,000.

Real-Estate Niche Goes Mainstream

부동산 틈새 시장이 주류 시장으로…

WSJ  10/25/23

• Excitement over artificial intelligence is powering a boom in what was once a small niche in the commercial real-estate business. Developers are rushing to build hundreds of data centers, especially those with the high power and cooling systems that AI servers need.
• Blackstone has grown its data-center development pipeline to more than $15 billion from only $1 billion in two years. Investment firms such as PGIM Real Estate and IPI Partners are raising billions of dollars for data center-specific funds, according to people familiar with the matter.
• In the U.S., one of the most popular locations is a 30square-mile section of northern Virginia dubbed “data center alley.”

Empty Downturns Need a Costly Fix

비어가는 도심, 비싼 재개발비…

WSJ   10/23/23

• For decades, downtown office districts across the U.S. powered local economies, generating commerce, tax revenue and disposable income. Many cities riddled with half-empty office buildings hope to survive the new remote-work era without demolishing and starting from scratch.
• Experts say American downtowns instead face the biggest urban makeover in 50 years. Even optimists estimate it will take years and cost billions to complete the large-scale changes to usher central-city office districts into a new role—busy neighborhoods where people live, work, raise families and find entertainment.
• Office building renovations are tough even under the best conditions. Demolitions are costly. Developers often have to buy out office leaseholders, and interest rates are high.

Bond Trades at 5% for First Time in 16 years

미국 국채, 16년만에 가장 높은 5% 에 거래

WSJ  10/24/23

• A deepening selloff in the U.S. bond market drove the yield on the 10-year Treasury note to 5% in intraday trading for the first time in 16 years, marking a milestone that has rattled stocks, lifted mortgage rates and fueled persistent fears of an economic slowdown.
• A critical driver of U.S. borrowing costs, the 10-year yield rose as high as 5.021% in early-morning trading Mon-day, up from about 3.8% at the start of the year.
• For investors, yields also represent a risk-free return that they can get by holding government bonds to maturity— an important benchmark for determining the prices of riskier assets such as stocks.

Economy Heats Up, Defying Predictions

예측을 뒤엎고 경제는 튼튼…

WSJ   10/24/23

• Earlier this year, economists and Federal Reserve officials predicted that the U.S. economy would be sputtering by now as higher interest rates cut into spending and investment.
• The opposite is happening. Recent economic data suggest the economy is accelerating despite higher borrowing costs, the resumption of student- loan payments, and wars in Ukraine and the Middle East.
• After predicting a recession for the past year, economists surveyed by The Wall Street Journal this month said they now believe that the economy will avoid a downturn in the next 12 months.
• Where does the economy go from here? Three possible outcomes.

• First, even though hourly wages are going up, workers are working fewer hours. Year-over-year weekly wages adjusted for inflation fell 0.2% in September, the first decline since May. If this continues, households could pull back.
• Second, the economy could continue to run hot and send inflation up again. That could prompt the Fed to raise interest rates further, slowing the economy and raising the risk of recession.
• Third, growth could stay strong but inflation remain under control. This would be the best of all because it would imply higher productivity, meaning that the economy could produce more goods and services without bottlenecks that lead to inflation. If that is the case, stronger growth could continue without the Fed having to raise interest rates.

GDP/Payrolls/Retail/Manufacturing

WSJ  10/24/23

Housing Affordability Remains an Economic Burden

주택 구입 능력이 경제의 문제로…

WSJ   10/23/23

• The Commerce Dept’s report on GDP coming on Thursday will probably show that housing helped boost economic growth in 3rd Qt. That shouldn’t mask the fact that the housing market is utterly and horribly bad and that the economy is worse off for it.
• This past Thursday, the NAR said 3.96 million previously owned, or existing, homes were sold in September at a seasonally adjusted annual rate. That was down from 4.68 million a year earlier, and even lower than the levels plumbed right after the pandemic hit.
• Home prices rarely decline by much nationally, so affordability will likely continue to be a problem, resolved only if Americans’ incomes rise faster than housing values. If that does happen, it will probably be a yearslong process. Until then, housing will be a problem for the economy.

Inventory/Home Index

WSJ 10/23/23

Bank of Hope reduced 13% manpower

뱅크오브호프 구조조정… 13% 감원

Korea Daily  10/25/23

• The Bank of Hope restricted into four major parts: retail banking, commercial banking, corporate banking, fee based business.
• The restructuring announced on 23rd includes 13% reduction of man power and 9 retail stores including 2 stores in LA, California.
• The bank can save $40M and the cost of reduction will be $12M in 4th Qt this year.