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In this Real Estate News Brief for the week ending November 26th, 2022... what the Fed is expected to do next, what investors did not do in the third quarter, and a new rent growth report. \xa0 \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 \xa0 \xa0 Economic News \xa0 \xa0 We begin with a light week for economic news as most of us enjoyed a day with family and friends for Thanksgiving. But there are a few things to report. The Federal Reserve released the minutes of its last meeting which shows that most of the voting members feel it\u2019s appropriate to reduce the size of the rate hikes. They feel that aggressive measures are still needed, but that smaller hikes will give them an opportunity to evaluate the economic impact. They are hoping to avoid what they call a \u201chard landing\u201d as they tighten the reigns on the money supply. Economists are now expecting a half point rate hike at the meeting in December. That\u2019s after four consecutive three-quarter point hikes. (1) \xa0 \xa0 The Fed is hoping to control inflation without hurting the job market and causing layoffs. This last week, jobless applications jumped up a little, to 240,000 initial claims, but that\u2019s still near a low point. Continuing claims were also up by 48,000 to 1.55 million. Economists do see this slow creep higher as a result of Fed policy. Ian Shepherdson at Pantheon Economics told MarketWatch: \u201cWe are increasingly inclined to think that the trend in claims is now rising gently, as firms come under increasing pressure from the Fed\u2019s aggressive tightening.\u201d (2) \xa0 \xa0 The Commerce Department released the latest report on new home sales. It shows a 7.5% increase to a seasonally-adjusted rate of 632,000 in October. And that\u2019s with a record-high median price of $493,000. It was $455,000 in September. Some analysts say that home buyers may be rushing to close a sale before homes get any more expensive. As reported by MarketWatch, they also say the report doesn\u2019t include data on a high number of cancellations. They expect the housing market will continue to be a drag on the economy for several more quarters. (3) \xa0 \xa0 Consumer sentiment sank a bit more in November. The University of Michigan\u2019s consumer sentiment survey shows a drop to 56.8 because consumers are worried about inflation and the risk of recession. It was 59.9 in October and 73.6 in October of last year. When asked about inflation, participants said they expect inflation to run at an average of 4.9% next year, and drop down to 3% over the long run. The Fed pays attention to consumer expectations because it can influence future price trends. (4) \xa0 \xa0 Mortgage Rates \xa0 \xa0 Mortgage rates deflated a bit more last week. Freddie Mac says the 30-year fixed-rate mortgage was down 3 basis points to 6.58%. The 15-year was down 8 points to 5.9%. (5) \xa0 \xa0 In other news making headlines... \xa0 \xa0 Investor Buying Activity Falls 30% \xa0 \xa0 There\u2019s really never a bad time to buy real estate, so long as you find the right deal. And right now, it\u2019s a bit more difficult to find those deals. So much so, that the investor purchase of residential property dropped a whopping 30% in the third quarter. The Redfin study tracks 40 markets, and the results show that investors purchased around 66,000 homes in Q3 compared to 94,000 in Q3 of last year. But the report also shows that nationally, investors accounted for 17.5% of all home sales in the third quarter. That\u2019s a higher percentage than at any time before the pandemic. (6) \xa0 \xa0 While investors are facing the same economic headwinds as any home buyer, they are also waiting on the sidelines to jump back in. JPMorgan Chase recently announced that it plans to spend $1 billion on build-to-rent homes. The plan will launch with the purchase of 250 new rental homes in three communities in Atlanta. \xa0 \xa0 Rent Growth Slow to 18-Month Low \xa0 \xa0 One of the headwinds that investors are facing is a slowdown in rent growth, but it\u2019s also important to note that it\u2019s a slowdown. Although some rents in expensive areas may be experiencing a small amount of negative rent growth, rents are still rising in most parts of the country. But the slowdown is real.l (7) \xa0 \xa0 The Realtor.com October Rental Report shows that nationally multifamily rent growth has dropped to about 4.7% year-over-year. It also found that most landlords are planning to raise rents in the next year by smaller amounts. What\u2019s really happening is that rent growth is returning to normal after a period of astronomical rent growth that is no longer sustainable. \xa0 \xa0 Single-Family Homes Shrinking in Size \xa0 \xa0 The size of new single-family homes could shrink in the coming months, despite a trend for larger homes that began during the pandemic. The National Association of Homebuilders says it\u2019s a tug-of-war between demand for more space and a demand for less expensive homes. (8) \xa0 \xa0 The average size of a home grew 5.6% since the Great Recession while the median size is 9.7% higher. The NAHB expects that trend to reverse, as homebuyer budgets will probably take priority in the coming months. \xa0 \xa0 That\u2019s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! \xa0 \xa0 You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. \xa0 \xa0 Thanks for listening. I'm Kathy Fettke. \xa0 \xa0\xa0 Links: \xa0 1 - https://www.cnbc.com/2022/11/23/fed-minutes-november-2022.html \xa0 2 -\xa0https://www.marketwatch.com/story/u-s-jobless-claims-jump-to-240-000-highest-since-august-11669210939?mod=economic-report \xa0 3 - https://www.marketwatch.com/story/u-s-new-home-sales-defy-gravity-in-october-11669216932?mod=economic-report \xa0 4 -\xa0https://www.marketwatch.com/story/consumer-sentiment-stays-depressed-after-u-s-elections-11669216338?mod=economic-report \xa0 5 - https://www.freddiemac.com/pmms \xa0 6 - https://www.wsj.com/articles/investor-home-purchases-drop-30-as-rising-rates-high-prices-cool-housing-market-11669067972?mod=hp_lead_pos2 \xa0 7 - https://www.forbes.com/sites/brendarichardson/2022/11/18/rental-price-growth-slows-to-the-lowest-level-in-18-months/?sh=19aa21e3738e \xa0 8 - https://eyeonhousing.org/2022/11/new-single-family-home-size-trending-lower-2/