Weekly News (July 30, 2024)

Mortgage Interest Rates Review

United Mortgage Nation  7/30/2024

                  Federal Fund Rate: 5.25 -5.50%        Prime Rate: 8.25 – 8.50%  

“Home Equity Sharing Agreement” is increased

            “주택자산 계약” 형태 융자 늘어..  

Korea Times  7/26/24(Fri) 

• Due to high home prices and the fees to sell and buy the houses, new financing idea is getting attention : Home Equity Sharing Agreement. Typically the maturity period would 10-30 years, but when owners sell the property, they have to do the payment as agreed. 
• Also known as Home Equity Investment, home owners can receive the lumpsum amount of money with this agreement, but there is no monthly payment to pay. When the maturity period comes, borrowers can re-pay the principles and agreed some portion of increased equity of the house.
• Those who has lower credit scores and low income can use the agreement and they can utilize the funds to improve their homes or re-pay other high rated loan such as credit cards debt.

Cold-Storage Firm Plans IPO Up to $3.85B 

냉동 저장 회사, $3.85으로 주식상장    

WSJ  7/17/24(Wed) 

• Lineage, the largest refrigerator-storage company in the world by capacity, plans to raise up to $3.85B in blockbuster initial public offering that would be one of the biggest listings of the year. 
• The Novi, Mich.-based company said Tuesday it plans to offer 47M shares for $70 to $82 each, which would raise between $3.29 and $3.85B. 
• Lineage claims more than 480 warehouses counting about 84.1M sf in North America, Europe, and the Asia-Pacific region, and far outpaces its main U.S. rival Americold realty Trust in cold-storage capacity.

Home Prices Reach Record

 집값 여전히계속 최고점

WSJ    7/24/24(Wed) 

• Home prices hit a new high in June for the second straight month, the latest sign that the housing market is unaffordable to millions of Americans.
• The spring home-buying season, usually the busiest time of year for the housing market, was a dud this year. Home sales declined in June for the fourth straight time on a monthly basis. The combination of high prices and elevated mortgage rates has made homeownership less attractive to renters and deterred current homeowners from moving.
• But low inventory in much of the country is pushing prices higher. The national median existing- home price in June rose to $426,900, a record in data going back to 1999 and a 4.1% increase from a year earlier, NAR said Tuesday.

Home Prices Reach Record & Inventory

WSJ  7/24/24

Property Market Signals Bottom is near 

   상용건물 시장, 끝장으로 다가와… 

WSJ   7/30/24(Tue) 

• In the second quarter, portfolios of foreclosed and seized office buildings, apartments and other commercial property reached $20.5 billion, according to data provider MSCI. That is a 13% increase from the first quarter and the highest quarterly figure since 2015.
• Defaults and other kinds of distress have been steadily building in the commercial property market to near historic levels because of high interest rates and the slow return of workers to office buildings. 
• Distress is working its way through the financial system after more lenders conclude that obsolete office buildings won’t recover their former value, even when interest rates decline.
• That is leading to sales of foreclosed properties and distressed mortgages. It is also bringing an increase in short sales, where lenders and borrowers work together to unload troubled property for whatever they can get.

Distressed Commercial Properties

WSJ 7/30/24

Fed will freeze the rate this month, but cut in September

               연준, 9월에는 이자률 내릴거 

Korea Times  7/30/24(Tue) 

• The Fed is anticipated to freeze the rate this week’s FOMC, but to cut the rate in September, 2024, according to Financial Times. 
• As layoffs are increased, the unemployment rate is increased for last 3 months, shown 0.4% increase from the lowest point for past 12 month period.  This increase is approaching Sham Rule which is 0.5% unemployment rate increase indicate the start of recession. 
• Some economists pointed out that the rate cutting in September might be too late, taking the risk of triggering recession.   

Evergrande NEV Creditors Move for Bankruptcy

WSJ    7/30/24(Tue) 

• Shares of China Evergrande New Energy Vehicle fell sharply after creditors of two of its units asked a court to begin bankruptcy proceedings.
• Shares of the electric-vehicle unit of property developer China Evergrande Group fell 9% to 31 Hong Kong cents, the equivalent of 4 U.S. cents, Monday while Hong Kong’s headline Hang Seng Index rose 1.3%.
• Parent company Evergrande Group was ordered to liquidate in late January by a Hong Kong court after the developer failed to reach a restructuring plan with creditors.

McDonald’s Sales Cool as Diners Pull Back

 맥도날드 영업실적 저조, 저소득층 요식업계 경고 

WSJ     7/30/24(Tue) 

• McDonald’s said its sales last quarter sputtered as the burger giant grappled with consumers reining in their spending, sounding a warning for the restaurant sector.
• Chief Executive Chris Kempczinski said lower-income consumers began reducing their visits last year, but the slowdown has deepened and broadened across the U.S. and other major markets.
• Chicago-based McDonald’s kicked off a string of quarterly reports from U.S. restaurant chains this week. Restaurant stocks have slid in recent months as consumers’ discretionary spending comes under pressure, and Wall Street analysts expect some chains to fall short of earnings expectations.

McDonald’s declining sales

Founder of South Korea’s Kakao Arrested

                카카오톡 창업자 구속 되다

WSJ  7/30/24(Wed) 

• A Seoul court early Tuesday approved an arrest warrant for Kim sought by prosecutors investigating the stockrigging case. The court deemed Kim a flight risk, citing concerns about evidence destruction, they said.
• Kakao founder Brian Kim was arrested over allegations of stock-price manipulation during the acquisition of a K-pop agency last year, sending shares of the South Korean mobile internet giant on their sharpest daily drop in nearly two years.
• The prosecution alleges Kim was involved in manipulating the stock price of South Korean K-pop talent company SM Entertainment, which in February 2023 was up for sale, to frustrate rival bidder HYBE , the label behind boy band BTS, one of Korea’s bestknown K-pop acts. Kakao later acquired SM Entertainment.