Weekly News (January 3, 2024)

Mortgage Interest Rates Review

United Mortgage Nation 1/3/2024

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

PP Administration manager filed suit against the Mayor again

팔팍 로렌조 행정관 추가 소성 제기

Korea Times   12/15/23 

• PP Administrative officer Lorenzo filed a federal lawsuit against the borough, Mayor Paul Kim and Councilman Suk “John” Min, claiming retaliation for protected speech, conspiracy to violate his civil, rights and common law conspiracy to violate civil rights.  
• Lorenzo is currently in paid suspension be alleged for abuse of authority on contracts between public libraries and town government, and allegation of failure to comply with procedures established by the state law in contracts between town government and private sector.

At New Year, World Population hits 8 Billion

새해 첫날 세계 인구 80 억 돌파  

Korea Times  1/2/24

• Federal Census Bureau announced the world population at January 1st, 2024 will reach to 8 Billion by calculating the birth rate of 4.3 men/sec and death rate of 2 men/sec.   In 2023, it increased 75 Million. 
• US population increased 1.7 Million to 335.8 Million, which is up 0.54% in 2023.  According to Brookings Institute, population growth rate is under 4% during the decade between 2020s which was the lowest growth rate decade.   So far, lowest decade was 1930s through 1930 Great Depression and growth rate was 7.3%. 
• The rate of Immigrant, which was calculated by entry to US minus exit out of US, was 1 man/28.3 sec.   

Mortgage rates declined for two months to 6.6%

모기지 금리 두달째 하락세.  30년 고정 평균 이자률 6.6%  

Korea Daily  1/1/24

• Mortgage interest rates has been declined for two months continually to 6.67% which is lowest for the last seven months, according to Freddie Mac —  In May, mortgage rates was 6.57%.
• Declining mortgage rates doesn’t trigger more home sales yet, according to NAR.   Pending home index was the same as last month in November and it was 5.2% down from a year ago.
• Housing market will boost soon because lower rates are bringing potential home buyers who were previously waiting for on the sidelines back into the market.

Average 30-year fixed-rate mortgage

REIT Juggernaut Losses Strength

리츠 거대 기업들 힘을 잃고…

WSJ  1/2/24 

• From 2019 to 2022, a new type of real-estate fund became one of the hottest fundraising juggernauts on Wall Street by giving individual investors the chance to participate in soaring values of apartment buildings, warehouses and other types of commercial property.
• Last year, those funds, known as nontraded real-estate investment trusts, ran off the rails. As concerns increased about the troubled commercial-property market, fundraising plummeted by the funds’ sponsors, many of them giant investment firms such as Blackstone and Starwood Capital Group.  Meanwhile, redemptions soared as shareholders rushed to cash out. 
• Public REITs are traded on stock exchanges, while Investments in non-traded REITs are made mostly by individuals through financial advisers.

Nontraded REITs’ fundraising and redemption

Declining housing market affected related business sectors 

주택시장 한파… 관련업체들 한숨 

Korea Times  1/3/24

• NYT said on the 1st Jan the downturn of the housing market, which is a power gear for US economy, is affecting related business sectors such as home inspection, moving, house remodeling, furniture and home appliances businesses(Home Depot & Lowes) .
• NAR reported that homes sales in November declined about 7% from a year ago, but it increased 0.8% compared to Oct.   According to Redfin, more than 80% home owners have purchased houses when interest rates were lower than 5%. 25% of home owners did at below 3% rates.  
• More eminent impacted area were RE agents, mortgage brokers, escrow companies. 

Apartment rent relief is Expected to Persist

아파트 렌트 상승은 멈추고 그대로 유지… 

• The apartment rental market finally stopped clobbering tenants with big price increases in 2023. That trend will likely continue in the new year, even as job growth and housing demand remain high in many parts of the country because a surge in new supply that has pushed vacancy higher, making it harder for landlords to raise prices. 
• Real-estate firms are projecting total rent growth in the very low single digits this year. Data provider Yardi Matrix predicts rents will rise 1.5%, while commercial-property firm CBRE estimates growth of 1.2%.
• Despite expectations for a so-so 2024 for landlords, demand for rental housing is still described as strong by investors and analysts. That is particularly true for single-family homes for rent, which have been more resilient than apartments.

Renters’ Income/Median rent change/Apartment construction

Japan Buyers Return to Overseas Markets

일본 부동산 투자자들 해외시장으로 눈 돌리기…

WSJ   1/3/24 

• Big Japanese investors stumbled disastrously into the U.S. commercial real-estate market in the late 1980s, when they bought high-profile properties like New York’s Rockefeller Center.   Now some Japanese institutional investors are back— this time it isn’t about big trophy purchases, but about diversifying portfolios for the long term and getting good bargains while the market is slumping.
• In June, Tokyo-based real-estate company Mori Trust said it invested in 245 Park Avenue, an office building next to Grand Central Terminal in Manhattan, jointly owned by SL Green Realty. Mori Trust was spending $700 million, for its share in the building plus renovations.
• Economists at three U.S. universities found a 49% decline in the long-run value of New York City office buildings owing to the rise of remote work.

EV Lose Momentum in the U.S

미국내 전기차 판매 부진 현상 두드러져      

WSJ  12/29/23

• EV sales growth hit the bump in the U.S. this year, and impact is being felt through the industry.  Carmakers around the world invested billions of dollars in EV technology spurred on by tailpipe-emission regulations designed to boost sales of battery-powered models. 
• But as customers in the US hesitate to make the switch from traditional gas-engine vehicles, some auto companies are delaying plans for EV spending. As a result, electric cars and trucks are piling up pm dealer lots, causing auto companies to reassess their investment plans such as combination of discounts and an attempt to draw in buyers. 

US EV statistics