Weekly News (March 24, 2021)

This week’s Interest Rate (11th Week)

(By Fairway Home Loan/ Time Mortgage)

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

• Interest rates is upward trend as of now. Investment property and the 2nd home product’s interest rate went up more than a primary residence.  Fannie and Freddie are making a big adjustment for the program.
• 2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375

  (WSJ 3/24)

NJ Renters can apply for up to a year’s assistance

(Record  3/24)

• New Jersey renters can now apply to receive to a year’s worth of housing assistance after the state launched its online application for $353M worth of grants for low-and median-income households behind on payment due to the COVID-19 pandemic.
• More than 350,000 New Jersey households are behind on rent payments, according to US Census data from late February.  To be qualified, their income is at or below 80% of the area median income. (To view the maximum income limit of your county, visit nj.gov/dca/cverap2.shtml )
• If applicants need assistance, call the Department of Community Affairs at 609 490 4550.

Bergen County(NJ) median home price increased in January

(Record  3/24)

• The move to suburban during the pandemic is boosting demand for North New Jersey homes, and the luxury market sales pull up the median price.
• According to NJNAR, the median single family home price rose 13.8% in Bergen County in Jan compared with Jan 2020, from $493,000 to $560,000.
• New suburbanites’ search for more square footage, large backyards and good schools made locations in North New Jersey popular destinations.  The appeal of these locations is that they are within commuting distance of New York City.
• While higher priced homes take longer to sell, there is a demand.  We have seen a few homes go above what we would consider to be the market value recently in the three to four million dollar price range in Northern Bergen County, said Jon Corbiscello, a broker associate at Keller Williams City Views in Fort Lee.

New Star Realty founder, Chris Moonkey Nam (66: 남문기) died of liver cancer

(Korea Times   3/22 )

• Chris Nam was the founder of New Star Realty and the 23rd President of the Federation of Korean Associates.
• New Star Realty, Inc is one of the largest Korean-American owned real estate companies in U.S. and Chris Moonkey Nam founded the company in 1988 in LA, Cal.
• The company has expanded its branch offices in Cal and other states including in New York, which was closed its office about 2 years ago. (C Land Realty NY took the office space where they ceased to operate)
• The widow Jenny Nam has been the president of New Star Realty for a while. During over 30 year operation, they have operated a real estate school, advertisement agency, IT business, and escrow company, and operated across 30 branch offices with more than 1000 agents.

Construction material’s price is soaring : lumber price doubled

( Korea Daily 3/20)

• Due to manufacturing scheduling, supply chain collapse, demand increase, the construction material cost is increased significantly.  The material cost increase and low inventory can become major variables in the housing market. Especially lumber cost is increased more than 100%, which is one of main cost of building a house along with the cost of the lot and labor, according to WSJ.
• NAHB said that lumber cost for a single house rose $24,000 and $9,000 for an apartment, and the recent material cost increase level went over the level that the current market cannot handle.
• The price of oil, which is raw material for paint, pipe, roof and flooring, is also increased 80 %.  Marbles, Insulation materials, PVC, concrete block and bricks has hit the record prices this year.

New real estate agents increased sharply in U.S.

(Korea Times/ WSJ 3/24)

• WSJ reported on 21st that the number of newly licensed real estate has been increased rapidly due to loss of other jobs during pandemic and increase of home prices.
• According to NAR, the number of REALTORS is 1.45M which is larger than the total number of houses on the market which is 1.04M. The number of agents are increased 4.8% from the last year and the house inventory on the market has been reduced 26% which is the lowest since 1982.

Bitcoin moves to Wall Street

(Korea Times/ Nasdaq 3/22 )

• The investment Bank Morgan Stanley announced its move to allow its top-level clients access to bitcoin funds.  Although there would still be a degree of insulation separating these investors from the actual bitcoin itself, this move marks a significant step in the progress of banks toward full adoption of cryptocurrency.
• To qualify to these funds, clients will need to have at least $2M in assets held by Morgan Stanley, have held accounts with the bank for longer than 6 months and can only invest up to 2.5% of their net worth into these funds, in addition to the demand for high risk tolerance.
• Even where skepticism remains in the banking industry, it is absolutely clear that the previous disdain that the filed has held for bitcoin in the past is simply no longer possible.
• Still pessimistic view exists : 95% of bitcoins is controlled by 2.4% of the total accounts which means bitcoins are concentrated to very small number of people that it cannot be a method for general payment tool.  Anonymity of bitcoin owners can make use of criminal activities.  Mining of bitcoins produces too much carbon footprint.

3rd Stimulus package money goes to Stock Market

  (Korea Times  3/22)

• While EIP ($1400) reaches to young people, the survey says they will invest the money to the stock market. According to USA Today report, the Deutsche bank researched on 430 people said they invest 37% of EIP to the stock and especially people between 25 – 34 years old said they will invest 50% of EIP to the stock.
• People between 18 – 24 years old said 40% to the stock market, people between 35 – 54 said 37%, over 55 year old said 16%.

This year, World Economic Growth forecasted 4.7% 

(Korea Times   3/22)

• UNCTAD (U.N. Conference on Trade and Development) has adjusted economic growth forecast to 4.7% which is increased by 0.4% on 18th from 4.3% which was forecasted in September 2020.
• China will grow 8.1%, U.S will grow 4.5%, Europe will grow 4.0%, Japan will grow 2.1% and Korea will grow 4.0%.   In U.S, the 3rd stimulus package which was bigger than expected will play positive factor.
• UNCTAD announced that the world production has dropped 3.9% due to COVID-19.

Federal Reserve’s SLR decision will affect Interest Rates?

(Korea Time / Seeking Alpha /Market Watch 3/22 )

• Fed Reserve decided to end a capital break which allowed Wall Street during the COVID crisis : SLR (Supplementary Leverage Ratio) requirement is that the biggest banks with more than a total assets of $250B should keep its own capital over 3% of the total assets.
• During the pandemic, it allowed banks to exclude from their SLR Treasury securities they hold and central bank deposit.
• This might initiate a few things: It will trigger Interest rates increase and long-term U.S. bond yields increase and the biggest banks’ deposit away