BROADCASTS.com

b'

In this Real Estate News Brief for the week ending June 25th, 2022... what the Fed Chief is promising about inflation, what\\u2019s happening with home price cuts, and top destinations for home buyers, and investors.

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.

Economic News

We begin with economic news from this past week. Fed Chief Jerome Powell expressed his resolve, once again, to control inflation, but also warned that the Fed\\u2019s aggressive interest rate hikes could result in some job losses. The Fed raised rates by three-quarters of a percent at the June meeting, and is planning to hike it again in July by either a half or three-quarter percent.

Powell acknowledges that the Fed misjudged the risk of inflation and should have moved faster with the rate hikes. Powell said: \\u201cWe did underestimate it. With the benefit of hindsight, clearly we did.\\u201d He says Fed officials anticipated a speedier end to the pandemic and supply chain issues, but that supply chain problems \\u201cremain problematic.\\u201d (1)

Unemployment claims were down slightly last week, but they remain at a five-week high. Economists say it\\u2019s a sign that the job market is cooling off although there\\u2019s still a record number of job openings, and not enough employees to fill them. According to MarketWatch, 34 states and U.S. territories show a \\u201cdecline\\u201d in jobless claims, while 19 show an increase. (2)

New home sales picked up in May. The Commerce Department reports they were up almost 11% to a seasonally-adjusted annual rate of 696,000. That\\u2019s a big jump from the April numbers which came in at 629,000. They are still down 5.9% for the year however. Home price growth is slowing, thanks to rising mortgage rates. The median sales price for a new home was $449,000 in May. That\\u2019s down from a record high of $454.700. (3)

Existing home sales were down in May, for a fourth month in a row. According to the National Association of Realtors, they were down 3.4% to a seasonally adjusted annual rate of 5.41 million. There are far fewer existing homes for sale than new homes. While the supply of new homes could last more than 7 months, the supply for existing homes is just 2.6 months. The median price for an existing home has hit a new record high of $407,600. (4)

Consumer confidence is dropping as inflation continues. The University of Michigan consumer sentiment index shows it fell to an all-time low of 50 in June. 50 is considered the mid-point between positive and negative on a scale of 100. Consumers are unhappy about high prices and the impact on their standard of living. (5)

Mortgage Rates

Mortgage rates continue to move higher. Freddie Mac says the average 30-year fixed-rate mortgage rose 3 basis points to 5.81%. The 15-year was up 1 basis point to 4.92%. (6)

In other news making headlines\\u2026

Sellers Are Cutting Prices

We\\u2019re starting to see more price cuts for listed homes. Data real estate firm Redfin says that almost one out of five home sellers lowered their price in May. That\\u2019s the highest rate of price cuts since October of 2019. (7)

Zillow economist Nicole Bachaud told Market Watch that it\\u2019s a sign of the housing market rebalancing. She says: \\u201cThe share of listings with a price cut is creeping up, possibly a sign that sellers cannot be quite as ambitious in their pricing strategy as they coil have in recent months.\\u201d She says homes are selling as fast as they ever have, and the typical homes is selling in seven days for more than the listing price.

Homebuyers Love Florida

Redfin also did a little research on current trends for homebuyer destinations. It says that buyers are chasing after affordability, and that found that two Florida cities topped the destination list in April and May. Miami was number one as it has been all year, and Tampa pushed Phoenix out of the way for second place. (8)

Tampa has become very popular since the start of the pandemic. Prices are up 28% year-over-year, but Tampa remains relatively affordable. A typical Tampa home sells for around $370,000. The national median is $424,000.

Redfin says that Tampa is attracting a lot of newcomers from New York and the Northeast. Redfin says it\\u2019s also attracting a lot of investors, which we, at RealWealth, can attest to. It\\u2019s a strong market for rental properties, including single-family homes.

You can find out more about buying single-family rentals by going to our website at newsforinvestors.com. It\\u2019s free to join, and free to talk to our investment counselors, and get access to our list of resources. Joining a network is also a great way to meet other like-minded investors like yourself.

That\\u2019s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I\'m Kathy Fettke.

Links:

1 -https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-house-testimony/index.html

2 -https://www.marketwatch.com/story/unemployment-claims-fall-slightly-to-229-000-but-labor-market-might-be-cooling-off-11655988191?mod=economy-politics

3 -https://www.marketwatch.com/story/u-s-new-home-sales-stronger-in-may-11656079765?mod=economic-report

4 -https://www.marketwatch.com/story/u-s-existing-home-sales-fall-for-4th-straight-month-in-may-while-prices-skyrocket-11655820059?mod=economic-report

5 - https://www.marketwatch.com/story/consumer-sentiment-drops-to-record-low-as-inflation-worries-grip-u-s-11656079725?mod=economy-politics

6 -https://www.freddiemac.com/pmms

7 -https://www.marketwatch.com/picks/the-share-of-listings-with-a-price-cut-is-creeping-up-5-economists-and-real-estate-pros-on-what-the-housing-market-will-look-like-this-summer-01654028472

8 -https://www.redfin.com/news/may-2022-housing-migration-trends/