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In this Real Estate News Brief for the week ending July 9th, 2022... why the job market is reducing recession anxiety, the big mortgage rate turn-around, and Airbnb\\u2019s contest for unique listing ideas.

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. The job market is showing a lot of muscle, despite concerns about a recession. The government reported last week that companies created a whopping 372,000 new jobs in June. That\\u2019s well above Wall Street estimates for 250,000 new jobs. (1)

Companies may have a hard time filling all those positions however due to a severe labor shortage. As reported by MarketWatch, there are two open jobs for every person looking for one, or about 11.3 million job openings. (2) Layoffs are also at historically low levels, including the number of people working part-time because they had their hours reduced. The report says there are 3.6 million involuntary part-timers. That\\u2019s the lowest level in 21 years. (3)

Despite that good news, the unemployment numbers are up slightly for last week. The Labor Department reports that initial claims were up 4,000 last week, to 235,000. That\\u2019s the highest level in six months. They were as low as 166,000 just four months ago. (4) But unemployment is still at 3.6% and the big picture is that job creation and hiring are strong. ZipRecruiter chief economist Julia Pollack says: \\u201cThis is not what a recession looks like.\\u201d

St. Louis Fed President James Bullard is also seeing signs of economic strength. He\\u2019s predicting economic growth for the year despite the slowdown we\\u2019re already seeing due to the Fed\\u2019s rate hikes. He says he\\u2019s basing his calculations on \\u201cgross domestic income\\u201d instead of \\u201cgross domestic product.\\u201d The GDI is the income that\\u2019s earned on the production of the GDP. While the GDP has already contracted in Q1 and may have done so in Q2 as well, Bullard says the GDI shows that the economy is actually expanding. (5)

Mortgage Rates

Mortgage rates did a big U-turn this last week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 40 basis points to 5.3%. The 15-year fell 38 points to 4.45%. (6) The drop in rates along with a 5.4% drop in mortgage applications is a sign that the housing market is cooling off. (7)

In other news making headlines...

On-Time Rent in Underwriting

Freddie Mac is making it easier for some renters to qualify for a mortgage. As of July 10th, Freddie is including on-time rental payments in its underwriting system. (8)

Freddie started encouraging landlords to report on-time rental payments to credit bureaus last November. It also offered an incentive in the form of closing cost credits for multifamily loans. That apparently attracted a lot of landlords.

HousingWire reports that 70,000 households within more than 800 multi-family properties are now enrolled, and that more than 15,000 renters have been able to establish credit scores. Fannie Mae began a similar program last year.

Rent Growth Slowdown

The latest rent report from Zumper shows a slowdown in rent growth. It says that rent levels typically peak during the summer because a lot of people are moving but this year, Zumper\\u2019s National Index is up only .5 percent for one-bedroom apartments and down a big 2.9 percent for two-bedroom apartments. That lowers the national median price for a two-bedroom apartment to $1,707, and slightly increases the median rent for a one-bedroom to $1,421. (9)

Airbnb Party Ban Now Permanent

Airbnb\\u2019s temporary party ban is now a permanent ban on \\u201cdisruptive parties and events.\\u201d That includes open-invite gatherings as well as one-night rentals for a large crowd. Airbnb initiated a ban on \\u201cparty homes\\u201d after an Airbnb shooting in 2019 that killed five people. It then called for a global ban on Airbnb parties at the start of the pandemic. (10)

The global ban has reduced complaints by 44% but hasn\\u2019t stopped them altogether. Airbnb says that people booking remote accommodations can often invite as many people as they want without getting caught. Airbnb says if they are caught, they could face consequences, including suspension or a permanent ban from the website.

Airbnb OMG! Fund

On a lighter note, there\\u2019s still a few weeks left to participate in Airbnb\\u2019s search for the craziest listing ideas, and the winners will get a hefty sum of money to make their crazy ideas a reality. Airbnb is funding the contest with a $10 million \\u201cOMG! Fund.\\u201d That\\u2019s enough money to give 100 people $100,000 each to help finance these projects.

The ideas will be judged on originality, feasibility, the experience the space will provide to guests, and sustainability. The deadline to apply is July 22nd. Check for a link in the show notes at newsforinvestors.com if you want to know more! The Airbnb announcement includes a lot of examples for inspiration.

That\\u2019s it for today. Please remember to hit the subscribe button, and leave a review! And thank you for listening!

Thanks for listening. I\'m Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-june-11657282206?mod=mw_latestnews

2 -https://www.marketwatch.com/story/u-s-job-openings-dip-to-11-3-million-but-labor-market-still-historically-strong-11657122659?mod=economy-politics

3 -https://www.cnbc.com/2022/07/08/involuntary-part-time-worker-numbers-dip-to-lowest-level-in-21-years.html

4 -https://www.marketwatch.com/story/u-s-unemployment-claims-rise-to-6-month-high-of-235-00-in-possible-sign-of-rising-layoffs-11657197517?mod=jeffry-bartash

5 -https://finance.yahoo.com/news/feds-bullard-sees-continued-u-170206923.html

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

7 -https://www.marketwatch.com/story/mortgage-rates-fall-amid-rising-concerns-over-a-recession-11657203176

\\u200b8 -https://www.housingwire.com/articles/freddie-mac-to-include-on-time-rent-payments-into-underwriting/

9 -https://realestateinvestingtoday.com/zumpers-national-rent-report-for-june-22/

10 -https://www.cnbc.com/2022/06/28/airbnb-makes-its-party-ban-permanent.html

11 -https://www.google.com/search?q=airbnb+omg+fund&rlz=1C5CHFA_enUS822US822&oq=airbnb+omg+fund&aqs=chrome..69i57j69i60.4025j0j7&sourceid=chrome&ie=UTF-8