In this Real Estate News Brief for the week ending October 22nd, 2022... what’s ahead with the Fed’s next meeting, the decline of the urban office, and the hybrid workplace challenge.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 forward-looking news about the Fed’s next meeting. Federal Reserve officials are set to hold their meeting on November first and second, and will likely approve a .75 rate hike. They will also be discussing the size of a potential rate hike in December that many economists foresee as a smaller increase. Fed Governor Christopher Waller said in a recent speech: “We will have a very thoughtful discussion about the pace of tightening at our next meeting.” (1)The jobless rate went down by 12,000 applications last week as the effects of Hurricane Ian disappeared. Initial claims dropped to a three-week low of 214,000 which indicates that layoffs are still very low. Despite all the turbulence going on economically, the low numbers mean that the job market is still very strong. (2)U.S. housing starts did a big reversal in September. They were up 13.7% in August, and dropped to a seasonally adjusted 8.1% last month. On an annual basis, they were down 7.7% in September. When you separate single-family homes from apartments, new single-family starts were down 4.7% and a big 13.1% for multi-families. Residential building permits were up 1.4% to 1.56 million which beat some analysts expectations. The numbers reflect weakening demand in the midst of high prices and shortages. (3)Home builder sentiment is also suffering. The National Association of Home Builders’ monthly confidence report shows the index dropped eight points in October, to just 38. Anything under 50 is considered negative. It’s the tenth month in a row that the index has fallen and it’s now the lowest it’s been since August of 2012. Just one year ago, the index was at 80. (4)Existing home sales continue to drop further, as the housing slowdown continues. According to the National Association of Realtors, they were down a seasonally adjusted 1.5% in September, to an annual rate of 4.71 million homes. It’s the eighth month in a row that existing home sales have declined. If you exclude pandemic interference with the market, sales haven’t been this low since September of 2012. Looking back one year, sales are off 23.8%. (5)Buyers are being cautious as the market changes. The median price for an existing home was down in September from $389,500 to $384,800. Inventory is also dropping. It was down 2.3% to 1.25 million homes last month because many people are staying put, and not selling. Homes are typically staying on the market for 19 days, which is up from 16 days a month ago. Before the pandemic, homes were averaging one month on the market.Mortgage RatesMortgage rates have topped 7% for some lenders, but Freddie Mac says the average rate for a 30-year fixed-rate mortgage is 6.94%. That’s up 2 basis points from the week before. The 15-year was up 15 basis points to 6.23%. (6)In other news making headlines...Urban vs. Suburban Office SpaceVacancies are rising for urban office space as leases expire, and companies change their workplace strategies. A report by Marcus & Millichap shows that urban office vacancies rose 550 basis points from the beginning of the pandemic until June of last year. They’ve risen more slowly since then, but they are still up 30 basis points since June to 18.6%. Meanwhile, suburban office vacancies have gone “down” 30 basis points, and rents are up 2.9%. (7)The report in GlobeSt.com says that “suburban properties continue to be more resilient than their urban counterparts.” They are also much cheaper to rent at about two-thirds the price. This reversal is working well for some companies with employees who now prefer the suburbs, although decisions on return-to-work policies are still