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The Real Estate News Brief: Atypical Winter for Home Sales, Investor Buying Spree, Love Letter Lawsuit
The Real Estate News Brief: Atypical Winter for Home Sales, Investor Buying Spree, Love Letter Lawsuit
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Length:
6 minutes
Released:
Dec 1, 2021
Format:
Podcast episode
Description
In this Real Estate News Brief for the week ending November 27th, 2021... the winter forecast for home sales, what investors are doing with their money, and who’s suing lawmakers over real real estate “love letters.”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 NewsWe begin with economic news from this past week, and a Fed that’s growing more concerned about inflation. Central bank officials still believe that prices will rise more slowly next year, but they are acknowledging that inflation pressures could last longer than they anticipated because of labor and supply chain shortages. These issues have pushed the yearly inflation rate to a 32-year-high of 6.2%. If you recall, inflation was close to “zero” about a year ago. The situation could prompt the Fed to begin the tapering of its bond-buying program “before” the end of this year. It has been buying $120 billion in Treasurys and mortgage-backed securities as an economic stimulus. (1)High prices are not preventing consumers from spending money. They have extra cash to spend from pandemic savings along with higher wages and bigger paychecks. That pushed consumer spending up 1.3% in October. According to MarketWatch, about half of the increase is due to inflation, so spending is up about .7%. (2)The latest unemployment report shows the number of people applying for state benefits is now “below” pre-pandemic levels. The Labor Department says initial applications dropped to 199,000 the week before Thanksgiving. That’s the lowest level since November of 1969. The number of continuing claims also dropped to a pandemic low of about 2.05 million. (3)New home sales continue to rise. They were up .4% in October, according to the Commerce Department. The median price of a home is now $407,700. That’s a new record high. The report also shows that builders are pumping new homes into the market. The supply was up 3.3% to a 6.3-month supply. (4)The sale of existing homes also rose in October, because of high demand, but buyers are still dealing with a lack of supply and higher prices. According to the National Association of Realtors, sales were up .8% between September and October, to a seasonally-adjusted annual rate of 6.34 million. That’s also 5.8% lower than the year-ago numbers. (5)Despite the low unemployment figures and the amount of consumer spending, consumer sentiment has now dipped to a 10-year low. The University of MIchigan index dropped from 71.7 in October to 67.4 in November. Consumers are mostly concerned about inflation, and a lower standard of living because of those higher prices. (6)Mortgage RatesMortgage rates held steady last week. Freddie Mac says the average 30-year fixed-rate mortgage is 3.1%. The 15-year is up 3 basis points to 2.52%. (7)In other news making headlines…Cold Winter, Hot Housing MarketThe typical winter slowdown for home sales is probably not going to happen this year. Economists from realtor.com and the National Association of Realtors expect strong demand to continue right through the holidays into next year. (8)Realtor.com’s Danielle Hale says the demand continues and that “sellers can expect to see plenty of buyers” while NAR’s Lawrence Yun expects “more sales compared to pre-pandemic winters going back all the way to 2006.”In addition to this persistent demand for housing, supply chain issues have delayed some buyers who will continue to search for their dream homes this winter. The limited inventory will also give seller’s an incentive to put their homes on the market.Investor Buying SpreeInvestors are also very busy. Redfin reports that investor purchase activity for residential property is up 80% in the third quarter compared to a year ago. It says that investors bought 18% of all the homes sold in Q3, and spent a record $64 billion. If you translate that into the number of homes purchased by investors, the total was a record 90,215 homes. Almost 75
Released:
Dec 1, 2021
Format:
Podcast episode
Titles in the series (100)
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