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Weekly News (February 02, 2022)

Interest Rate (5th Week)

(By Fairway Home Loan)

  

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y (%)
A year ago      2.625       2.290     2.490          1.105
A month ago      3.490       2.625     3.250          1.746
Last week      3.599       2.799     3.250          1.794
This week      3.750       3.000     3.250          1.805

  Prime Rate: 3.0% / Ref IR: 0.00- 0.25% .

  • 3% Down payment for 1st home buyer is available.
  • 5% Down payment 2-4 units FHA program available
  • 15% Down payment 2 families -conventional program available.
  • Potential home buyer — Have a pre-approval first before the shop.  Now we have 48hour underwriting turn-around times for regular loans.
  • Self employed borrower – Need to prepare 3 month business bank statements and the YTD Profit and Loss Statement. YTD income can’t decline more than 30% compared to last year.
  • 2022 Conventional loan limit:

Conforming SFR : $647,200.00/ Conforming high balance: $970,800.00

Confirming 2 Family: $828,700/ Conforming High Balance: $1,243,050

 

Englewood Cliffs bill dispute heads to court

(Record  2/2)

  • A group of Englewood Cliffs residents and officials is asking a judge to prevent the borough from continuing to pay a law firm that has amassed nearly $1M in legal billings.
  • They also want the court to hold the mayor and three councilmen personally responsible for some of the fees($300,000). Their motion comes as part of a lawsuit they filed in January against Englewood Cliffs, Mayor Mario Kranjac and Councilmen Timothy Koutroubas, Mark Park, and Ramon Ferro. That suit accuses the four of violating state statue by hiring and paying for New York-based Cadwalader, Wickersham & Taft to handle affordable housing litigation for the town.
  • The firm was originally hired in July for an amount not to exceed $100,000. Since the firm has billed the borough for close to $1M at an hourly rate of over $1,000 an hour. However, the law firm was never licensed to practice in New Jersey and was unable to win permission from the court to do so.

 

New Jersey is one of Instable Real Estate market of U.S

(Korea Daily  2/1)

  • ATTOM Data Solution has reported 50 Counties in US which are classified as instable Real Estate market among 575 Counties in U.S. in 4th Qt 2021. 13 New Jersey Counties belong to these instable 50 The criteria for classification were 1) Ownership sustainability 2) Affordability 3) Number of foreclosures under the Coronavirus impact.
  • There are 21 Counties in New Jersey in total and more than a half of Counties belong to instable Counties.
  • The reasons are 1) negative economic impact 2) instability of employment 3) high level of property tax – average annual tax is $9,300 in New Jersey.
  • Meanwhile only one County, Rockland County in New York belongs to those 50 instable Counties.

 

NYC Construction sector fully recovered

(Korea Daily 2/2)

  • According to REBNY’s recent report, 665 construction permits have been filed in 4th Qt 2021, which is up 37% compared to 3th Qt, up 22% compared to a year ago, and it was the highest since 2nd Qt 2016.
  • The aggregate total area of the 665 permit applications is 31.7M sf which is up 260% compared to 3th Qt. and up 180% compared to a year ago.
  • The one of major part of the increase is residential complex such large apartment units: total 24,834 units have been applied, which is the highest since 2008, and it is up 300% compared to 3th Qt 2021 and up 240% from a year ago.
  • However, still NYC needs more residential units: they will demand about 560,000 residential units by 2030 due to population increase, new job creation, and various redevelopment projects.

 

Home Owner’s Insurance increased 42% since 2009

(Korea Times 2/1)

  • According to Bankrate.com’s report surveyed from 35,000 postal codes in U.S. on 142 home owner’s insurance companies, nationwide average home owner’s insurance annual premium was $1,312.00, or monthly $109.00 and it was 1.91% of the median income.
  • The average insurance premium in Cal was $1,014.00, or monthly $85.00 and it was 1.3% of the median income. They paid $1,863.00(Monthly $155.00) in TX, $1,376.00 (Monthly $115.00) in GA, $1,353.00 (monthly $113.00) in FL, $987.00(Monthly $82.00 in NY, and $751.00(Monthly $63.00) in New Jersey.
  • Meantime, most expensive insurance premium was $3,519.00 in OK and most inexpensive insurance premium was $376.00 in HI.
  • Average premium is also different depending on insurance company: Farmers average premium was $1,980.00, State Farm’s average premium was $1,503.00, Allstate’s average premium was $1,458.00, Traveler’s average premium was $1,269.00, Hartford’s average premium was $1,609.00, Nationwide was $1,042.00, Progressive was $1,206.00, etc.
  • In general, the premium is more expensive where there are more natural disasters such as flood.

 

Bond Market Hints at Calm

(WSJ 2/2)

  • Yields on longer-term U.S. government bonds have shown signs of stabilizing in recent days, easing the pressure generated on stocks by their rapid early-year climb.
  • Behind the move: deep skepticism among many investors that the Fed will raise short-term interest rates as high as they did in the last economic expansion – a level that was itself lowest peak for rates over the past seven decades.
  • Fed Chairman Jerome Powell sent shudders through markets last week when he didn’t rule out relatively aggressive steps to help bring down inflation, such as rate increase at consecutive meetings or a half-a-percentage point increase at a single meeting.
  • Investors pay close attention to longer-term Treasury yields because they help set borrowing cost across the economy and are a key input in stock valuation models. The recent stabilization in yields has coincided with a rebound in stocks, with the tech-heavy Nasdaq Composite Index rising 7.4% over the past three sessions.

100 higher Credit Score saves $110,000 interest payment

(Korea Daily 1/31)

  • While there is possibility of more than 3 times interest rate increase forecasted, home sale activities are still active even during winter season. Daniel Hail chief economist at Realtor.com said slowdown of home sales during winter season did not happen this winter.
  • According Loan Savings Calculator as of 1/18/2022, $400,000 loan with 30 year-fixed mortgage rate of 4.74% when credit score ranged between 620-639 incurs $2,084.00 monthly payment and the accumulated 30 year interest payment will be $350,304.00 while it becomes $236,459 with 3.373% interest rates if the credit score increases 100.
  • In order to keep the good credit score, buyer needs to make payment without delay, use about 10% of the given credit limit, use credit longer term, and need to monitor at least once a year.

 

Others/Tech News: “LG Energy” launched IPO in perfect time.

-IPO raised $10.6B and the share ended 65.8% higher than the IPO price.

-LG Energy provides alternatives to China battery

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Stephen Lee

He has been in Real Estate industry in about 20 years and has been Broker of Record for 9 years. His experience includes residential, commercial, and property management. Prior to involving with Real Estate business, he has been involved in the digital communication equipment industry utilizing his engineering background and education, including running own company. He has established C Land Realty in 2011 which has grown to staffing over 100 Real Estate agents and the annual transaction amount of over $110,000,000 today.

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