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In this Real Estate News Brief for the week ending March 19th, 2022... we check on the Fed\\u2019s rate hike, look at a range of inflation projections, and get the latest update on single-family rent growth.

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, and the first interest rate hike in four years. The Federal Reserve has said that a quarter point rate hike was likely at its March meeting to control inflation, and that\\u2019s exactly what committee members approved. That puts the overnight lending rate between a quarter and a half point. The Fed warned that another six rate hikes are likely this year and that half point moves are a possibility. Fed Chief Jerome Powell says: \\u201cI guess I would say the expectation still is that inflation will come down in the second half of this year, but we still expect inflation to be high this year.\\u201d (1)

The Fed is expecting inflation will average 4.3% for the year. Inflation is currently running at 7.9%. If you remove food and energy from the calculation, the Consumer Price Index or CPI is 6.4%. The Russian war on Ukraine is expected to push prices even higher. (2) A survey by the New York Federal Reserve shows that many Americans believe that inflation will be running a lot higher than the Fed is predicting \\u2013 at about 6% for the year. MarketWatch also reports that some analysts are forecasting even higher rates of about 9% by next spring. (3)

The latest report on wholesale inflation shows that wholesale prices rose .8% in February. That brings the wholesale rate of inflation up to 10%. But as MarketWatch reports, there is a \\u201csilver lining\\u201d in this data because the core rate of wholesale inflation, which excludes food and fuel, was only up .2% for the month. On the other hand, economists say we haven\\u2019t yet seen the war\\u2019s impact on commodity prices. An Oxford Economics economist told MarketWatch: \\u201cInflation in the pipeline is showing few signs of decelerating in the near term, especially as the Russia-Ukraine war wreaks havoc in energy and other commodity markets.\\u201d (4)

The latest unemployment report shows a dip in applications. They dropped to 214,000 which is a 2-and-a-half-month low. The total number of continuing claims is also lower, at 1.42 million. Companies are holding off on layoffs because of the labor shortage, and employees are enjoying more options when it comes to who they are going to work for. (5)

Builders broke more ground on new homes in February. The government says that new home starts rose 6.8% in February. On an annual basis, they were up 22% compared to last February. Most of the increase was driven by single-family home construction with a 5.7% increase. There was a drop in permit applications however, for both single-family and multi-family projects. As MarketWatch reports, builders may be focusing more on the permits they already have than they are on getting new ones. (6)

Existing home sales were down in February. The National Association of Realtors says they decreased 7.2% to a seasonally-adjusted annual rate of 6.02 million. NAR\\u2019S chief economist, Lawrence Yun, says: \\u201cHousing affordability continues to be a major challenge, as buyers are getting a double whammy \\u2013 rising mortgage rates and sustained prices increases.\\u201d (7)

Mortgage Rates

And those mortgage rates did jump higher this last week. Freddie Mac says the average 30-year fixed-rate mortgage broke through the 4% mark for the first time since May, 2019. It was up 31 basis points to 4.16%. The 15-year was up 30 basis points to 3.39%. (8)

In other news making headlines\\u2026

Single-Family Rents

Single-family rents continue to run hot with rents in some metros rising four times faster than they did last year. The index shows that rental prices are up 12.6% on average compared to 2.6% last year. (9)

CoreLogic offered an example saying that tenants with a $1500 a month rent might get a renewal letter that raises the rent to almost $2,100 a month. But again, that\\u2019s where rents are rising the fastest. Miami tops that list with rents that are jumping 38.6% year-over-year. But rent growth is between 15 and 20% in many of the other largest U.S. metros, like Phoenix, Las Vegas, San Diego, Austin, Boston, Dallas, and Atlanta.

Russians Unloading Homes

Wealthy Russians are pumping luxury homes back into the market, as they try to offload their U.S. assets. The New York Post cites several examples of new multi-million dollar listings by Russian owners, since the Russian invasion of Ukraine. (10)

One of the areas where these homes are popping up is called \\u201cLittle Moscow\\u201d in Sunny Isles Beach, Florida. Brokers say that their phones are \\u201cblowing up\\u201d with calls from panicked Russian homeowners. They want to know how much their properties are worth and they want to sell quickly to all-cash buyers. They say active listings in that area have suddenly surged about 9%.

Best Time to List Homes

One thing in the sellers\\u2019 favor right now, is \\u201ctiming.\\u201d According to realtor.com, mid-April is the absolute best time to list your home \\u2013 specifically, April 10th through the 16th. Realtor.com\\u2019s researchers say that sellers who list in mid-April will get a head start on the competition. (11)

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

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Thanks for listening. I\'m Kathy Fettke.

Links:

1 - https://www.marketwatch.com/story/fed-raises-rates-and-plots-strategy-of-steady-further-increases-11647453994?mod=newsviewer_click

2 - https://www.marketwatch.com/story/u-s-inflation-rate-climbs-again-to-7-9-cpi-shows-and-ukraine-war-threatens-more-pain-for-consumers-11646919280?mod=article_inline

3 - https://www.marketwatch.com/story/americans-think-inflation-will-top-6-a-year-from-now-11647270119?mod=economy-politics

4 - https://www.marketwatch.com/story/u-s-wholesale-inflation-surges-again-and-jumps-10-in-past-year-11647348016?mod=mw_latestnews

5 - https://www.marketwatch.com/story/u-s-unemployment-claims-drop-to-10-week-low-of-214-000-as-hiring-revs-up-11647520732?mod=bnbh_mwarticle

6 - https://www.marketwatch.com/story/new-home-construction-activity-improves-as-builders-work-through-backlog-of-permits-11647521669?mod=mw_latestnews

7 - https://www.marketwatch.com/story/buyers-are-getting-a-double-whammy-existing-home-sales-fall-as-affordability-concerns-mount-11647613098?mod=economy-politics

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

9 - https://www.mortgagenewsdaily.com/news/03152022-rent-rent-price-growth-sfri

10 - https://magazine.realtor/daily-news/2022/03/14/russians-unloading-luxury-homes-across-us

11 - https://magazine.realtor/daily-news/2022/03/15/mid-april-the-best-time-to-list