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In this Real Estate News Brief for the week ending August 13, 2022\\u2026 a surprise inflation report, how that might impact mortgage rates, and a solution for the housing crisis involving women and immigrants.

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 report on the Consumer Price Index, or CPI, shows a bigger-than-expected decline in July. According to the Labor Department, the annual rate of inflation dropped from 9.1% to 8.5%. Economists surveyed by Dow Jones had expected a reading of 8.7%. The decrease was mostly due to a big drop in gas prices. The core rate, which omits prices for fuel and food, was also better than expected at 5.9%. (1)

Producer prices also put on the brakes in July. That index was down .5% after a 1% jump in June. As reported by Market Watch, it\\u2019s the first drop in producer prices since April of 2020. (2)

Jobless claims were up by about 14,000 to a total of 262,000 new claims for the week. There\\u2019s been a slow increase in applications as the Fed tightens its monetary policy and companies tighten their belts, slightly. Stuart Hoffman at PNC Financial told CNBC: \\u201cThe rise in initial claims since early April is a cool breeze blowing over a hot labor market.\\u201d Continuing claims also rose to a total of about 1.43 million. (3)

Consumers are feeling a little better about the economy because of falling gas prices. The University of Michigan\\u2019s Consumer Sentiment Index was up four points to 55.1 in August. MarketWatch reports that lower gas prices have put consumers in a better mood but they are still concerned about the cost of things like food and rent. (4)

Mortgage Rates

Mortgage rates also jumped back over 5% last week. Freddie Mac says the average 30-year fixed-rate mortgage rose 21 basis points to 5.22%. The 15-year was 4.59%.

Freddie says: \\u201cAlthough rates continue to fluctuate, recent data suggests that the housing market is stabilizing as it transitions from a surge of activity during the pandemic to a more balanced market.\\u201d (5)

In other news making headlines\\u2026

NAR: Mortgage Rates May Have Topped Out

The latest inflation reports have led some economists to believe that we won\\u2019t see mortgages go much higher than they are now. The Chief Economist for the National Association of Realtors, Lawrence Yun, believes that the worst of the situation is now behind us. (6)

He said in a realtor.com blog: \\u201cIf there is a sustained decline in gasoline prices and more production of apartments and single-family homes, consumer prices will pull back, encouraging the Federal Reserve policy to be less aggressive.\\u201d And that: \\u201cMortgage rates will fall.\\u201d

Auction.com: Foreclosure Spike Expected

Foreclosure activity is expected to increase over the next 12 months, as pandemic-related protections expire for seriously delinquent homeowners. The information comes from a survey by Auction.com with dozens of clients. (7)

The survey shows that nine in 10 mortgage servicers are expecting more foreclosures. 74% expect a \\u201cslight increase\\u201d while 15% expect a \\u201csubstantial increase.\\u201d

The expected foreclosure rate is below historical averages nationwide but some clients expect 30% or more of their delinquent inventory to end up in foreclosure. The survey shows that the loans most likely to foreclose are government-insured loans and properties in the Midwest.

Women & Immigrants to the Rescue!

Getting more women and immigrants interested in the construction industry could help solve the housing crisis. Home builders have been dealing with a severe labor shortage, and a Harvard researcher told members of Congress recently, that the industry could expand its workforce by promoting the industry to women and immigrants. (8)

Harvard\\u2019s Christopher Herbert says the industry is \\u201coverwhelmingly male\\u201d and needs more women on the job. He also pointed out that 20 years ago \\u201cwe built two million homes a year\\u2026 and a lot of that was through immigration.\\u201d Currently, about 25% of workers are immigrants although some states, like California and Texas, have a much higher percentage. About 11% of construction workers are women.

That\\u2019s it for today. If you\\u2019d like to read more about any of these topics, check the show notes (below) for links at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!

If you haven\\u2019t yet joined RealWealth, please sign up. It\\u2019s free and will give you access to our members-only Investor Portal where you\\u2019ll find data on specific markets, the property teams that we work with, and other resources.

Thanks for listening. I\'m Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/coming-up-u-s-july-cpi-data-due-at-8-30-am-eastern-11660132986?mod=mw_latestnews

2 -https://www.marketwatch.com/story/u-s-producer-prices-moderate-in-july-11660221842?mod=bnbh_mwarticle

3 -https://www.marketwatch.com/story/u-s-jobless-claims-move-higher-in-latest-week-continuing-recent-trend-11660222483?mod=economic-report

4 -https://www.marketwatch.com/story/falling-gas-prices-buoy-consumer-sentiment-temper-inflation-expectations-11660313127?mod=newsviewer_click

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

6 -https://magazine.realtor/daily-news/2022/08/11/yun-slowing-inflation-suggests-mortgage-rates-have-topped-out

7 -https://www.housingwire.com/articles/expect-a-foreclosure-spike-in-the-coming-months/

8 -https://www.marketwatch.com/story/the-solution-to-the-labor-shortage-in-construction-more-women-and-immigrants-says-harvard-researcher-11657823746?mod=real-estate-construction