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In this Real Estate News Brief for the week ending March 18th, 2023\u2026 the latest reports on inflation, why homebuilders blame the media for skittish homebuyers, and what international buyers think about the U.S. real estate market. \xa0 Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. \xa0 Economic News \xa0 We begin with the latest economic news from this past week, and what a week it\u2019s been. The banking crisis continues to underscore the impact that interest rate hikes can have on the economy. Economists are now predicting that the Fed may only raise rates a quarter point when it meets in the coming week, instead of the previously anticipated half point rate hike. (1) \xa0 The latest inflation reports are also encouraging. The Consumer Price Index was up .4% in February. That\u2019s after a .5% increase in January. The lower rate of inflation brings the annual rate down to 6% from 6.4%, which is still high, but receding. The CPI\u2019s core rate was a bit higher. It was up .5% on a monthly basis with an annual rate that is now at 5.5%. The core rate doesn\u2019t include prices for food or gas. (2) \xa0 The Producer Price Index was also down an unexpected .1% in February. Economists had expected a .3% gain. The decrease brought the annual rate down to 4.6% which is substantially below the January reading of 5.7%. Most of the decline was due to a steep drop in egg prices. They came down more than 36%. The Fed will be paying attention to both those reports at the upcoming meeting, along with the risk to banks that rate hikes are causing. (3) \xa0 The job market continues to show strength. Jobless claims tumbled to 192,000 last week. That\u2019s down from 212,000 the week before. The report suggests that companies are not laying off many workers, despite the tough economy. (4) \xa0 The government also reported good news about home construction. Housing starts were up almost 10% in February. Economists had estimated a seasonally adjusted annual rate of 1.31 million, but the report shows 1.45 million. It\u2019s the first time in six months that new home construction is higher. Building permit applications also surged higher by almost 14% indicating more new homes are in the pipeline. They are now up to 1.52 million, while economists had forecast 1.34 million. (5) \xa0 Builders are also showing more confidence. The National Association of Home Builders reports that its home-builder confidence index is up for a third month in a row. The reading is now up to 44 which is still below the midway point of 50. It was at 79 last year at this time. The NAHB says that home buyers are still wrestling with high prices and a tight inventory while builders are dealing with tight credit and a dwindling number of buildable lots. (6) \xa0 Mortgage Rates \xa0 After several weeks of slowly rising mortgage rates, they reversed course after the bank failures. That\u2019s due to investors shifting money to safer assets such as Treasury notes and bonds. When that happens, Treasury yields fall along with mortgage rates which tend to follow those yields. Freddie Mac says the average 30-year fixed-rate mortgage was down 13 basis points to 6.6%. The 15-year was down 5 points to 5.9%. (7) \xa0 In other news making headlines\u2026 \xa0 Homebuilders Blame the Media for Buyer Fears \xa0 Homebuilders are blaming the media for headlines that are scaring off home buyers. The NAHB says that almost 80% of home builders believe this. Last year, it was only 55%. \xa0 The issue is that most reports about the real estate market provide information on the entire U.S. But the nation is made up of hundreds of smaller real estate markets, and while some are seeing a pullback, others are doing quite well. Also, many buyers may not understand that a recent dip in home sales is part of a return to normal after a pandemic-related home-buying frenzy while interest rates were still super low. \xa0 Last November, a Lending Tree survey showed that 41% of consumers believed we\u2019re headed for a housing market crash within the next year. While many consumers are worried about a repeat of the 2008 housing market crash, economists have offered many reasons why that won\u2019t happen in today\u2019s environment.\xa0 \xa0 Chief economist for Nest Seekers International, Erin Sykes, says: \u201cWe\u2019re now in a more balanced, health housing market.\u201d And that\u2019s the headline she\u2019d like home buyers to pay attention to. \xa0 Foreign Buyers Rank U.S. Housing Market as \u201cExcellent\u201d \xa0 International buyers have a much healthier opinion about the U.S. housing market than domestic buyers. According to a survey by Global Luxury Coldwell Banker Real Estate, 80% of the participants call U.S. real estate a \u201csafe investment.\u201d The majority also rank U.S. real estate as either excellent or good. Contrast that with the Fannie Mae Home Purchase Sentiment Index which shows 79% of consumers saying it\u2019s a bad time to buy a home.\xa0 \xa0 Liz Gehringer of Coldwell Banker Affiliate Business says for the international buyer, the dream of homeownership is alive and well, although she says that international buyers also tend to buy in cash. She says: \u201cAffluent buyers are flocking to diverse U.S. locations to enhance their portfolio diversification, with many opportunities for growth, investment and building long-term wealth.\u201d \xa0 The top international buyers are coming from China, Canada, India, and Mexico. Most are buying properties in Florida, California, and Texas.\xa0 \xa0 That\u2019s it for today. You can find out how to diversify your portfolio by joining RealWealth at newsforinvestors.com. It\u2019s free to join, and free to access all our data and resources. You can check the show notes for links and please remember to hit the subscribe button, and leave a review! \xa0 Thanks for listening. I'm Kathy Fettke. \xa0 Links: \xa0 1 - https://www.cnbc.com/2023/03/17/fed-poised-to-approve-quarter-point-rate-hike-next-week-despite-market-turmoil.html \xa0 \u200b\u200b2 - https://www.marketwatch.com/story/cpi-shows-slightly-cooler-u-s-inflation-but-pressure-still-on-fed-to-raise-rates-fe88e2f5?mod=economic-report \xa0 3 - https://www.cnbc.com/2023/03/15/ppi-february-2023-.html \xa0 4 - https://www.marketwatch.com/story/jobless-claims-tumble-to-192-000-and-show-no-sign-of-rising-layoffs-a2a78aa2?mod=economy-politics \xa0 5 - https://www.marketwatch.com/story/u-s-housing-starts-rise-by-9-8-in-february-led-by-a-surge-in-apartment-construction-aa4d395c?mod=economy-politics \xa0 6 - https://www.marketwatch.com/story/u-s-builder-confidence-rises-for-third-consecutive-month-despite-high-mortgage-rates-and-construction-costs-fa26d3a?mod=home-page \xa0 7 - https://www.freddiemac.com/pmms \xa0 8 - https://www.nar.realtor/magazine/real-estate-news/is-the-media-keeping-home-buyers-in-a-state-of-fear \xa0 9 - https://www.nar.realtor/magazine/real-estate-news/rich-foreign-buyers-call-u-s-housing-market-excellent