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Weekly News (June 2, 2021)

This week’s Interest Rate (21st Week)

(By Fairway Home Loan )

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y(%)
A year ago      3.250       2.750     3.490          0.718
A month ago      2.875       2.250     2.625          1.618
Last week      2.875       2.250     2.490          1.576
This week      2.899       2.375     2.490          1.632

 

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

  • 2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375

 

 “Gateway” project approved by Federal Government

(Korea Daily  6/2)

  • Under the Biden Admin, the Gateway project is moving forward smoothly: total project cost is $30B and the project includes two new tunnels under the Hudson River, replacement of the Portal bridge in NJ.
  • With this project Amtrack passengers will be doubled passing new tunnels under the Hudson River.
  • According to WSJ, FRA and FTA have completed the environmental study new tunnel project under the Hudson River on 5/28/2021.

 

Korean house owning rate is relatively low among other Asian

(Korea Daily   6/1 )

  • According to Zillow/ACS, Taiwan house owning rate is the highest, 69.2% among 25 Asian communities.  The 2nd place is Vietnam (66.9%), the 3rd place is Japanese (65.9%), 4th place is Chinese (63%), the 5th place is Pilipino (62.2%).  Korean is 16th place (50.7%).
  • Median income of Korean is $71,220 and it is 12th.  The highest median income community is Indian ($119,120).  The 2nd place is Taiwan ($100,149) and the 3rd place is Pilipino ($94,961).
  • In the report, Zillow pointed out that Asian house owning rate increased 6% compare to 2020 and the gap from White house owning rate reduced.

 

1.1M renters might be kicked out to street

(Korea Times  6/ 2)

  • While the moratorium to ban the eviction will be ended by the end of this month, 1.1M renter who could not pay rent will be forced out to street.
  • Last month a few courts including Washington, D.C court judged that it is illegal for CDC dictates eviction moratorium.  While total delayed rent would be about $70B, the landlords say that it is way beyond that federal government handles the situation.
  • Federal government prepared $45B to support renters and experts say that the eviction lifts has to be postponed till this fund will be dispensed fully.
  • National Low Income Housing Coalition reported that there are about 360 programs funded by federal government currently.

 

Startup Aims to Sell Small Investors on a wager on Single-Family Rentals

(WSJ    6/2)

  • A startup that wants to open the single-family home rental market to small investors is ramping up its home purchases, after winning the backing of Goldman Sachs Group.
  • Real-Estate firm Fundrise manages a fund that enables customers to invest as little as $500 in homes going up in fast-growing cities such as Charlotte, NC, Tampa, FL, and San Antonio.
  • Goldman Sachs last week provided $300M credit facility to Fundrise, the startup said.
  • The fund has raised $200M since its January launch, and has bought or signed the contracts to buy around 2500 homes, Fundrise chief executive Ben Miller said.
  • Most single-family rental homes are owned by small landlords who often live nearby.  Companies like Fudnrise and California-based Roofstock hope to make it easier to invest in these properties afar.  He sector has attracted more foreign institutions.

 

Janet Yellen announced the current inflation is temporary

(Korea Times  5/28 )

  • According to Bloomberg, the secretary of Treasury, Janet Yellen forecasted at the congressional hearing that the current inflation is temporary and it might continue to the end of this year.
  • Despite many people say that this inflation is side effect from mass-production of US dollars in the pandemic situation with keeping zero interest rates, Yellen said that it is because of the bottleneck effect of supply chain and pertinent expenditure change due to the pandemic.

 

Raised home price triggers Federal Reserve to think the Tapering

(Korea Time  6/1 )

  • As April CPI increased to 4.2%, more pressure to Federal reserve to initiate tapering strategy which means end of quantitative easing.  The vice chair person of Federal Reserve mentioned the future FOMC might have to discuss the tapering and the next FOMC is scheduled on 6/15 – 6/16.
  • CEO of Morgan Stanley, James Gorman mentioned that consumer price increase can be long term and the tapering can start toward the end of this year and interest rates increase can start early next year, which is faster than the Wall Street’s general opinion.
  • In general, Wall Street forecasts that the will start early next year and interest rates increase will start toward end of the next year.

 

Rent is moving up as the economy is recovering

(Korea Daily   6/1)

  • RealPage reported that April rent increased 1.3% which is the highest record for the last 10 year.  Rent in urban area like San Francisco is recovering as well.
  • SFR(Single Family Residential)’s rent also increased sharply: CoreLogic reported that rent in SFR increased 4.3% in April compared to the same period a year ago.  Currently demand for SFR exceeds it supply.  Also potential home buyers failed to buy a home due to low inventory are forced to move to rentals.
  • Investors purchased SFR in 1Qt increased 2.7% compared to the same period of a year ago and most investors are better equipped than move-in home buyers.

 

Private Sales squeeze Housing Supply

(WSJ  5/27)

  • In the vast majority of transactions, an agent lists a home for sale on a local database, called MLS and markets the property widely to drum up interest and get the best price.
  • But in certain cases, a broker will show an unlisted property to a small circle of potential buyers more exclusively, often in hope of getting a deal done quickly: called a packet listings or whisper listings.
  • The new NAR policy requires agents to add listings to their local MLS within a business day of publicly advertising the listing, But there is a notable exemption: Listings can be still be kept off the database if they are only shared within one brokerage, called an “office exclusive”.
  • In Des Moines, Iowa, Refin estimated that 5.4% of sales were likely done without being publicly listed in the year ended in March, up from 3.1% two year earlier. In Tampa, Fla, the proportion of estimated pocket listings rose to 6.1%, from 4.4% two years earlier, Redfin said.
  • Bright MLS, a database that covers parts of six Eastern states and Washington, D.C., said its research in 2019 and 2020 showed that in its region, properties that weren’t listed on the database sold for l6% to 20% less than properties that were listed.  There is some privacy issue, but the point is that they should know ahead of time that they’re actually probably going to get less money for their house.

 

Others/Tech News: NJ resumes (max.) $7500 incentive program to EV buyers from July.

  • In 2020, the $5000 incentive program for under $550,000 sale or lease was finished successfully ( 7000 buyers)
  • NJ’s goal is to increase EVs to 330,000 by 2025. Federal Financial Committee just passed the bill to increase the EV incentive to $12,500
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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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