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In this Real Estate News Brief for the week ending August 20th, 2022... a big plunge in home sales, rent increase impact on tenants, and Airbnb’s new anti-party technology. 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. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Economic News We begin with economic news from this past week, and a big drop in residential construction activity. The Commerce Department says that housing starts were down 9.6% year-over-year in July to their lowest level since early last year. Building permits also fell in July. They were down 1.3% compared to June. (1) HousingWire Data Analyst, Logan Mohtashami, says that homebuilders are pulling back until mortgage rates fall and home-buying activity picks up again. (2) One reason that home builders are pulling back is the cancellation rate among buyers. A survey by John Burns Real Estate Consulting shows that

In this Real Estate News Brief for the week ending August 13, 2022… a surprise inflation report, how that might impact mortgage rates, and a solution for the housing crisis involving women and immigrants. 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 News We begin with economic news from this past week. The report on the Consumer Price Index, or CPI, shows a bigger-than-expected decline in July. According to the Labor Department, the annual rate of inflation dropped from 9.1% to 8.5%. Economists surveyed by Dow Jones had expected a reading of 8.7%. The decrease was mostly due to a big drop in gas prices. The core rate, which omits prices for fuel and food, was also better than expected at 5.9%. (1) Producer prices also put on the brakes in July. That index was down .5% after a 1% jump in June. As reported by Market Watch, it’s the first drop in producer prices since April of 2020. (2) Jobless claims were up by about

New home construction plunged in July, according to the Commerce Department. The reports shows that housing starts fell 9.1% in July to a seasonally adjusted annual rate of 1.45 million. That’s down from a revised 1.6 million in June, and the lowest level of new home construction since the start of the pandemic in 2020. (1) I'm Kathy Fettke. Single-family construction was down even more, at 10.1%. Permits for new homes were also down 1.3%. But the regional numbers are wildly different, with the Northeast seeing a 65.6% increase in total housing starts. The other three regions account for the big drop. Builders say more homebuyers are canceling contracts because of high prices for homes, mortgages, and the cost of living in general. One in five says they have reduced their home prices in the past month to limit contract cancellations. The Commerce Department says the average cost to build a home has gone up almost 38% since January of 2020. That, along with rising mortgage rates, and supply-chain issues that c

A Finnish company is hoping to give U.S. home buyers something they’ve been craving! Real estate software company CubiCasa just launched a product in the U.S. that produces a FREE floor plan that sellers can put into for-sale listings. According to the National Association of Realtors, it’s something that just 10 to 15% of U.S. listings include right now, but it’s third on a list of desirable listing features! 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. Clear Capital purchased CubiCasa last September, so it’s now a subsidiary of Clear Capital, but it operates independently. CubiCasa says on its website that it’s the market leader for this kind of software in its home country, and is already being used in more than 170 countries around the world. With its introduction into the U.S., it says it’s one of the major players here and will help revolutionize the home-buying experience. (1) Market Properties More Effectively with F

Housing costs have surged over the last year or so, but a new report shows that demand is still strong due to several factors, and that pricing pressures may ease up in the months ahead. The Joint Center for Housing Studies at Harvard University just released its annual State of the Nation’s Housing report, and I’d like to share some of the highlights. 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. Home Price Appreciation Nationwide home price appreciation hit 20.6% in March of this year. That’s up from 20% in August of last year. The data shows record-high appreciation in 67 of the top 100 markets, and the rest were also up by at least 9%. Harvard researchers say higher home prices are keeping about 4 million renters from buying their own homes, and that increases demand for rental housing. (1) Those who can qualify for a home often can’t find one in their price range. They are also competing with investors who have increased

We have a quick news update on today's inflation report. Investors have been waiting anxiously to see if inflation hit a peak in June and is now headed down, prompting the Fed to slow down on rate hikes. Well, we have good news. The report on the Consumer Price Index, or CPI, shows a bigger-than-expected decline in July. It shows that the annual rate of inflation dropped from 9.1% to 8.5%. Economists surveyed by Dow Jones had expected a reading of 8.7%. 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. The decrease was mostly due to a big drop in gas prices. The report says the gasoline index was down 7.7% which offset a rise in food and housing costs. When you look at the broader category of energy, that was down 4.6% because of a drop in gasoline and natural gas prices, but the index for electricity was higher. (1) The core rate of inflation, which excludes food and fuel, remained the same as it was in June at 5.9%, but that wa

In this Real Estate News Brief for the week ending August 6th, 2022... the Fed’s next move, a mortgage rate rollback for home buyers, and a new all-time high for single-family rents. 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 News We begin with economic news from this past week. Federal Reserve policymakers say they are “nowhere near” the end of their fight against inflation. Four Fed Presidents spoke out on Tuesday, August 2nd, about their resolve to get inflation back down to 2%. San Francisco Fed Chief Mary Daly said that she is currently seeing a 50 basis point rate hike as appropriate in September, but she says: “If we just see inflation roaring ahead undauntedly, the labor market showing no signs of slowing, then we’ll be in a different position where a 75-basis-point increase might be more appropriate.” Comments from the other three Fed Presidents were similar. (1) And then there was a screamingly strong jo

In this Real Estate News Brief for the week ending July 30th, 2022... a negative GDP report, inflation heads higher, and the Fed’s latest rate hike. 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 News We begin with economic news from this past week. The Federal Reserve carried out its fourth rate hike this year to slow inflation, and the second increase of .75%. That puts the top end of the overnight lending rate at 2.5%. Higher rates make it more expensive for businesses and consumers to borrow money and that helps slow the economy, and the rate of inflation. (1) The latest reading on inflation was a report on the PCE or Personal Consumer Expenditure Index. That shows a 1% increase in June to a yearly rate of 6.8%, which is the highest since January of 1982. When you eliminate fuel and food, the core PCE is 4.8%. The Federal Reserve considers the PCE to be more accurate than the CPI because it takes into account othe

The latest reports on inflation have given the economy indigestion. The Consumer Price Index hit 9.1%, the Producer Price Index hit 11.3%, and the Fed’s preferred gauge, the Personal Consumption Expenditures Price Index or PCE, hit 6.8%. They are all signs that inflation is much too high and the reason the Federal Reserve just hiked short term interest rates another whopping three-quarters of a percent. So what’s the best way to invest when inflation is working against you? (1, 2, 3) 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. Four Peaks Capital put together a great list of all the options that I received in an email which I will share with you in this episode. The company is mostly focused on large multi-family projects, but this list pertains to everyone. Investing Options 1 - First on the list is cash. It’s not an investment as much as it is a way to preserve a certain quantity of money. But when there’s a high rate of i

The quitting trend that started during the pandemic is still here, and it’s not going away anytime soon. Job market trends are important to real estate investors because housing markets rely heavily where people are working. In this episode, you’ll hear about how the job market has changed, why more workers are quitting or changing the way they work, and the kinds of jobs they are seeking. (1) 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. This quitting trend has been called The Great Resignation, but a new study by McKinsey and Co. describes it as The Great Attrition which is now turning into The Great Renegotiation. This is happening because more and more people are rethinking their work-life balance and renegotiating the terms of their employment with a greater emphasis on their personal lives. The Great Renegotiation To get an idea of the magnitude of the change we’re seeing, data from the US Department of Labor shows the

In this Real Estate News Brief for the week ending July 24th, 2022... how Yellen would like to fix the supply chain, a return to 2007 housing affordability, and the latest way to make rental income off your property. 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 News We begin with economic news from this past week, and reassurances from former Fed Chief Janet Yellen. She said during an interview on NBC’s “Meet the Press” that the U.S. economy is slowing down, but says that a strong job market is proof that we’re not in a recession. (1) Her words come before a week of important economic reports. Coming up in the week ahead, the second quarter GDP, inflation, consumer income and spending, and what is expected to be a three-quarter point rate hike by the Federal Reserve. Let’s rewind to this past week. Although hiring is strong, the government reports a jump in state unemployment claims. They were up 7,000 to 251,000. W

Foreign investors are returning to the U.S. real estate market after a pandemic-related dry spell. A new survey by the National Association of Realtors shows a big increase in the dollar value of properties bought by foreign buyers in the last year. They had all but disappeared during the pandemic, but are slowly coming back – especially now that most travel restrictions have been lifted which makes it easier to visit properties before they buy. 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. The National Association of Realtors surveyed members about transactions they’ve done with international clients and released the results in a report called 2022 Profile of International Transactions in U.S. Residential Real Estate. (1) The transactions would have taken place between April of last year and March of this year. NAR Report on Foreign Buyers Foreign buyers purchased a total of $59 billion worth of existing homes during that ti

In this Real Estate News Brief for the week ending July 16th, 2022… a big surge in housing inventory, the rent growth rocket ship, and a supersized prediction for Social Security’s 2023 COLA. 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 News We begin with economic news from this past week, and another surprise surge in the consumer price index. The Labor Department says the consumer price index or CPI rose 1.3% last month. That puts the annual rate of inflation at a 41-year record high of 9.1%. That’s up from 8.6% in May. The core rate was a little more encouraging. It excludes food and fuel because those prices are so volatile. That was up .7% for June, which brought the annual rate “down” a tenth of a percent to 5.9%. (1) Wholesale prices also jumped higher. The producer price index was up 1.1% in June, mostly due to higher gas prices. That raises the annual rate from 10.9% to 11.3% - for wholesale prices. Again t

Home buyers are getting cold feet because of high home prices and mortgage rates. A new report from Redfin shows the number of buyers canceling deals is now the highest it’s been since the beginning of the pandemic. The pullback is also impacting builders. A report by John Burns Real Estate Consulting says they are lowering prices as they try to offload inventory. 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. The Redfin report shows that homebuyers canceled 15% of the deals that went under contract in June. That’s about 60,000 deals and the highest percentage of cancellations since the early days of the pandemic. About a month ago, in May, 12.7% of the deals were canceled. And about a year ago, that figure was 11.2%. (1) More Homebuyers Canceling Deals Analysts say buyers may have different motives for canceling their purchases including the possibility that home prices might go lower in the coming months, and they might get

In this Real Estate News Brief for the week ending July 9th, 2022... why the job market is reducing recession anxiety, the big mortgage rate turn-around, and Airbnb’s contest for unique listing ideas. 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 News We begin with economic news from this past week. The job market is showing a lot of muscle, despite concerns about a recession. The government reported last week that companies created a whopping 372,000 new jobs in June. That’s well above Wall Street estimates for 250,000 new jobs. (1) Companies may have a hard time filling all those positions however due to a severe labor shortage. As reported by MarketWatch, there are two open jobs for every person looking for one, or about 11.3 million job openings. (2) Layoffs are also at historically low levels, including the number of people working part-time because they had their hours reduced. The report says there are 3.6 mil

Economists have been weighing each twist and turn of the economy to determine whether we are going “up” or “down.” Many are predicting a recession at some point, while a few say we’re already in a recession because the economy is contracting. But does this economy show the typical signs of a recession? One MarketWatch contributor doesn’t think so. 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. As you may know, two quarters of negative economic growth are usually interpreted as a recession. We’ve already seen negative growth in the first quarter. The economy contracted at an annual rate of 1.6%. And now, there are analysts and GDP trackers that are predicting the second quarter will decline as well. The Q2 numbers won’t be out until the end of this month, but in the meantime, there are plenty of people looking at historical patterns to determine what might be happening, or not happening. Economy Still Quite Healthy MarketWatch

The housing market may be slowing down, but new homes are still a complicated, expensive process, mostly because of supply chain issues. One Bank of America analyst, who co-authored a new report on residential construction, says it’s like a game of whack-a-mole. He says: “Every time they find one thing that they fix, another one pops up.” 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. BofA just released its 2022 “Who Builds the House” report, which found that a shortage of building materials is one of the primary reasons for higher home prices. According to co-author Rafe Jadrosich, prices have risen at an “unprecedented rate” over the last few years because of the shortage of building materials. He told MarketWatch: “There’s always a new category that’s creating the bottleneck.” (1) "Who Builds the House?" The report says that the cost of materials to build a home went up 42% in just three years, from 2018 to 2021, and that i

In this Real Estate News Brief for the week ending July 2nd, 2022... why inflation appears to be slowing, what the GDP says about a potential recession, and the latest reports on rent growth. 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 News We begin with economic news from this past week. The rate of inflation appears to have slowed a bit. The Personal Consumption Index, or PCI, was up .6% in May with a yearly rate that was unchanged at 6.3%, but the core rate was down slightly. The core rate doesn’t include prices for food or fuel, and the yearly rate for that dropped from 4.9% in April to 4.7% in May. The Federal Reserve feels the PCI is more accurate than the Consumer Price Index or CPI, because the PCI factors in more variables, such as changes in consumer behavior. (1) It’s now official. The economy shrank 1.6% in the first quarter, and the Atlanta Federal Reserve is forecasting a negative reading for the seco

Members of Congress are taking a deep dive into the single-family housing market to find out “Where Have All the Houses Gone?” In this investigation, they took a close look at the business practices of the nation’s largest landlords – the institutional landlords that buy huge lots of homes at one time. Although the results show an adverse impact on certain communities and potential homebuyers, housing experts argue that investor ownership of rental property is more of a symptom than a cause. (1) 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. This investigation began last fall when a subcommittee of the House Committee on Financial Services sent a survey to five of the largest single-family rental companies in the U.S. Asked to participate in this survey were Invitation Homes, American Homes4Rent, FirstKey Homes, Progress Residential and Amherst Residential. The survey dug into things like where they are buying homes, what they

In this Real Estate News Brief for the week ending June 25th, 2022... what the Fed Chief is promising about inflation, what’s happening with home price cuts, and top destinations for home buyers, and investors. 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 News We begin with economic news from this past week. Fed Chief Jerome Powell expressed his resolve, once again, to control inflation, but also warned that the Fed’s aggressive interest rate hikes could result in some job losses. The Fed raised rates by three-quarters of a percent at the June meeting, and is planning to hike it again in July by either a half or three-quarter percent. Powell acknowledges that the Fed misjudged the risk of inflation and should have moved faster with the rate hikes. Powell said: “We did underestimate it. With the benefit of hindsight, clearly we did.” He says Fed officials anticipated a speedier end to the pandemic and supply chain is