In this Real Estate News Brief for the week ending May 21st, 2022… forbearance claims hit a two-year low, rent levels are setting new records, and a new list of the “best places to live”. 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 the past week, and comments from Fed Chief Jerome Powell about the central bank’s resolve to fight inflation. He told the Wall Street Journal that “restoring price stability is… something we have to do” and, he says, “there could be some pain involved.” (1)The Fed approved a 50 basis point increase for the federal funds rate at its last meeting. And, it expects to do the same at the next two meetings. The short-term rate is now within a range of .75 to 1%. Raising it another 100 basis points will bring it to 1.75 to 2%.Powell says it’s still possible to avoid a recession, but he’s now describing the process as a “soft-ISH” landing. (2) He hopes to control inflation without a big impact on the labor market. He says, if there is a recession he hopes it will be “short and not all that deep.”Many economists are lowering their economic forecasts because of inflation and higher interest rates. That includes Fannie Mae’s chief economist Doug Duncan. He says: “Financial conditions have tightened significantly and the economy is slowing faster than previously expected.” Fannie Mae now expects a full-year GDP of 1.3%. That’s .8% lower than the previous forecast. The Fannie Mae group is predicting a modest recession in the second half of next year 2023. (3)Jobless claims hit a four-month high last week. There were 218,000 initial claims, which is 21,000 more than the week before. The number of people collecting benefits is still extremely low. 25,000 people dropped off that list last week, for a total of 1.32 million. That’s the lowest number of claims since 1969. Economists are watching unemployment numbers closely because they typically rise before a recession. (4) New home construction hit a speed bump for the second month in a row. Housing starts were .2% lower to an annual pace of 1.72 million. Economists blame rising mortgage rates and higher home prices for the slowdown. Permits were down 3.2% to an annual rate of 1.82 million. A drop in single-family construction brought the numbers down. Starts on those projects were down more than 7% while multi-family starts were higher by almost 17%. Builders have shifted their focus to multi-family rental units as they try to meet the demand for housing. (5) Existing home sales were down in April. The National Association of Realtors says they fell 2.4% to a seasonally adjusted annual rate of 5.61 million. If you compare these numbers to a year ago, sales were down almost 6%. As reported by MarketWatch, this is the third straight month that sales have declined. Currently, there’s a 2.2 month supply of homes on the market. (6)Mortgage Rates Mortgage rates came down slightly last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 5 basis points to 5.25%. The 15-year was 4.43%. (7) In other news making headlines... Forbearance Claims Hit 2-Year Low The number of home loans in forbearance has now dropped below 1%. According to the Mortgage Bankers Association, forbearance claims dropped from 1.05% in March to just .94% in April. That’s about 470,000 loans. The MBA says this is the lowest level since June of 2020, right before the pandemic left many homeowners without a paycheck, and without means to pay their loans. (8) The five states with the highest number of loans in forbearance include: Louisiana, Mississippi, West Virginia, New York, and Oklahoma.The five states with the lowest number of loans in forbearance include: Idaho, Washington, Colorado, Utah, and Oregon. Rent Levels Are Setting New Records Scorching hot demand for rentals is pushing apartment rents higher once again. Realtor.com says the U.S. median rent