BROADCASTS.com

In this Real Estate News Brief for the week ending May 6th, 2023\u2026 why economists are expecting a rate hike pause, where homeowners are paying the most and the least for their mortgages, and new home search help from a chatbot! \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 economic news from this past week, and the big news is, of course, the Fed\u2019s rate hike. The Federal Reserve\u2019s Open Market Committee followed through on an expected quarter point hike to the overnight lending rate, which puts the target range between 5 and 5.25%. It was the 10th rate hike in a row and a unanimous decision among committee members, despite calls for a pause from some Congressional lawmakers. (1) \xa0 The Fed also appeared to suggest that it might now be time for a pause, by eliminating a sentence that says \u201csome\u201d additional rate hikes may be needed. Instead, the statement kind of hedged on the idea of rate hikes by saying that any further rate hikes would depend on \u201cthe cumulative tightening of monetary policy, the lags with which monetary policy affect economic activity and inflation, and economic and financial developments.\u201d Economists are interpreting that to mean that the Fed is prepared to take a more \u201cdovish\u201d approach at its next policy meeting. As MarketWatch puts it, the Fed is \u201con hold.\u201d \xa0 \xa0Fed Chief Jerome Powell also said in his press conference after the meeting that: \u201cWe are no longer saying we anticipate\u201d rate hikes. He says: \u201cWe will be driven by incoming data, meeting by meeting.\u201d (2) \xa0 Some economists say the Fed has already gone too far. Chief economist for the National Association of Realtors, Lawrence Yun, is one of them. He called last week\u2019s rate hike \u201cunnecessary and harmful.\u201d \xa0 Yun says inflation has been coming down and will continue to do so. He says: \u201cIt will be even lower as the heavyweight component to inflation, which is rent, will inevitably slow down given the robust, 40-year high in construction of new apartment units.\u201d He also says that many small banks are struggling right now. He says: \u201cThey are becoming zombie-like banks, unable to lend even to good businesses, as they are more concerned with balance sheet shuffling for survival.\u201d (3) \xa0 Meanwhile, there are new signs that the job market is softening. Initial claims were up 13,000 to a total of 242,000. That\u2019s up from about 200,000 in January. Continuing claims were down, however, by 38,000 to a total of 1.81 million. (4) The April jobs report also shows that the job market is still going strong. It shows that companies increased the number of available positions by 253,000. Wall Street economists had anticipated the addition of just 180,000 new jobs. The unemployment rate also declined from 3.5% to 3.4%. (5) \xa0 Mortgage Rates \xa0 Mortgage rates dipped a little this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down four basic points to 6.39%. The 15-year was up five points to 5.76%. (6) \xa0 In other news making headlines\u2026 \xa0 The Average Monthly Mortgage Payment \xa0 The average monthly mortgage payment is now $2,317. Lending Tree\u2019s latest study shows that the average U.S. home buyer needs a mortgage of $333,342 with the highest amounts needed in the District of Columbia, Washington State, and California. (7) \xa0 High priced states skew the averages however, so you need to look at the individual states to see how affordable they are. The three states with the lowest average mortgage amounts are West Virginia, Kentucky, and Michigan. In West Virginia, the average is just $1,700. \xa0 Homeownership Not a Priority Among Most Renters \xa0 A majority of renters don\u2019t see homeownership in their future. Online brokerage Home Bay conducted a survey that shows about two-thirds say they have lost hope in owning a home, although half of the respondents said that homeownership is \u201cvery important.\u201d Given their current situation, they\u2019d prefer to spend their money on other things. The top three priorities are paying down debt, having a comfortable retirement, and owning a car. (8) \xa0 Among the renters who want to own a home, a third are willing to pay a high price to do that including many who said they\u2019d skip meals or sell their plasma. Two thirds also said they would take on a second job. \xa0 Zillow, Redfin Launch ChatGPT Plugin \xa0 Searching for a home could get a little easier with the help of a chatbot. Both Zillow and Redfin announced that users will be able to get a ChatGPT plugin that will allow them to describe homes and have the chatbot show relevant listings. The OpenAI website says that only a small number of users have access to the plugins right now, but you can add your name to a waitlist. (9) \xa0 That\u2019s it for this week\u2019s News Brief. Check the show notes for links at newsforinvestors.com. You can also join RealWealth while you are at our website by hitting the \u201cjoin for free\u201d button. Membership gives you full access to our Investor Portal where you can see sample properties and connect with our network of real estate professionals, including our RealWealthinvestment counselors. \xa0 And please remember to subscribe to our podcast! \xa0 Thanks for listening. I'm Kathy Fettke. \xa0 Links: \xa0 1 - https://www.cnbc.com/2023/05/03/fed-rate-decision-may-2023-.html \xa0 2 - https://www.marketwatch.com/story/4-things-we-learned-from-powells-press-conference-after-latest-fed-rate-hike-4863f055?mod=federal-reserve \xa0 3 - https://www.nar.realtor/magazine/real-estate-news/yun-latest-fed-hike-unnecessary-and-harmful \xa0 4 - https://www.marketwatch.com/story/jobless-claims-climb-13-000-to-242-000-and-show-hints-of-labor-market-softening-41d5e71b?mod=economy-politics \xa0 5 - https://www.marketwatch.com/story/construction-spending-up-0-3-in-march-546e0768?mod=economy-politics \xa0 6 - https://www.freddiemac.com/pmms \xa0 7 - https://www.nar.realtor/magazine/real-estate-news/the-average-monthly-mortgage-payment-is-above-2300 \xa0 8 - https://www.cnbc.com/2023/05/04/renters-say-homeownership-is-hopeless-how-theyre-spending-instead.html?__source=realestate%7cnews%7c&par=realestate \xa0 \u200b\u200b9 - https://therealdeal.com/national/2023/05/04/redfin-zillow-adopt-chatgpt-plugins/ \xa0