In this Real Estate News Brief for the week ending September 3rd, 2022... why rate hikes might backfire, why economists are seeing a sharp increase in the housing supply, and what Elon Musk is saying about owning a tiny home in Texas.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. A paper released at the Jackson Hole Summit argues that the central bank cannot control inflation by rate hikes alone. Researchers from Johns Hopkins University and the Chicago Fed authored the report, and say rate hikes could make matters worse without a reduction in government spending. The federal debt is currently at 123% of GDP which is down slightly from early 2020 during the beginning of the pandemic, but it’s much higher than it has been since the mid-1940’s. As interest rates rise, so does the cost of that debt. (1)The latest reports on the job market, and manufacturing, both show that the economy is still in good shape. It’s still growing, but at a slower pace. A report from the Institute for Supply Management shows that new orders and employment increased, and that inflation was down slightly. It says there’s one red flag – that some companies have bloated inventories which could put them in a tough spot if the economy slows down any more. (2)Meantime, initial jobless claims dropped to a nine-week low of 232,000 which means there’s no sign of any big layoffs. Economists say this is one of the best barometers for economic health. (3) Job openings also expanded to 11.2 million in July. That’s up from 11 million in June. The unemployment rate is currently at 3.5%. (4)Home price growth was down in July. The S&P CoreLogic Case-Shiller 20-city index deceased from 20.5% in May to 18.6% in June. The national index was up a seasonally adjusted .3%, but that’s the smallest increase in two years. (5)Money spent on residential construction was down .4% in July. Economists expected it to fall because builders have been cutting back on their plans. Year-over-year, construction spending is still up 8.5%. (6)Consumers are feeling much better about the economy, now that gas prices have gone down. The consumer confidence index jumped from 95.7 to 103.2 in August. That’s the first time it’s gone up in four months. (7)Mortgage RatesMortgage rates are getting closer to the 6% level. Freddie Mac says the 30-year fixed-rate mortgage was up 11 basis points to an average of 5.66%. The 15-year was up 13 points to 3.98%. (8) Mortgage News Daily reports that the numbers from Freddie are way too low. It says the average is more like 6.23%. (9)In other news making headlines…Housing Supply to Increase SharplySome economists expect to see a big increase in housing completions in the coming months. The Calculated Risk blog says that even while housing starts slow down, builders will be finishing up many of the homes currently in the pipeline. That includes single-family and multi-family homes. (10)Bill McBride at Calculated Risk is estimating a 10% increase in completions this year to almost 1.6 million. That’s because there’s an unusually high number of housing units under construction due to supply chain issues.FSBO Is Not Very Popular Right NowA high number of home sellers have decided to go with an agent, instead of doing the deal on their own. The National Association of Realtors says that FSBOs, which stands for “for sale by owner,” typically rise during hot markets, but the latest Profile of Home Buyers and Sellers shows the opposite. FSBOs were just 7% of home sales last year. That’s the lowest percentage in about 30 years. 15 years ago, 12% of sellers decided to go it alone. (11) The report says that sellers are finding value in the hiring of real estate professionals. Among the benefits is the competitive pricing of a home, help with marketing to potential buyers, and negotiating the deal.Elon Musk Does, In Fact, Own a B