The Real Estate News Brief: Inflation Rate Rises, Home Equity Surges, and “The House that SHE Built”
Manage episode 294985079 series 1248803
In this Real Estate News Brief for the week ending June 12th, 2021… inflation hits a new 13-year high, homeowners make big gains in equity, and “The House that SHE Built” in Utah.
We begin with economic news from this past week. The latest inflation report shows another surge in consumer prices. The U.S. Bureau of Labor Statistics reported a .6% jump in the consumer price index last month. That puts the annual rate at a 13-year high of 5%. The core inflation rate, which excludes food and energy, also jumped .7% to a 29-year high of 3.8%. The Federal Reserve has assured Americans that these price increases are the result of a fast economic recovery, and will only be temporary. Some economists worry that the higher prices won’t come back down, but as MarketWatch reports, the debate is expected to “play out over the next year.” (1)
The number of people filing for unemployment continues to drop. The government reported just 376,000 new claims for the week ending June 5th. (2) The number of continuing claims also fell by another 258,000 to a total of 3.5 million. Combined with seven other state and federal programs, 15.34 million people are collecting checks. That’s about half the number at the same time last year.
While jobless claims went down, job openings shot up to a record high. The Labor Department says there were 9.3 million openings in April, which is about 1 million more than March, and about 5 million more than there were during the early months of the pandemic. (3) Employers say they are struggling to find people to fill open positions. A high number of people are also quitting their jobs. Economists say there are several reasons for this situation, including early retirement, trouble finding childcare, extra unemployment benefits, and fear of COVID.
Consumers regained their confidence in the economy in June. The University of Michigan’s consumer sentiment survey shows a 4-and-a-half point increase to a reading of 86.4. That’s after it hit a 13-month high in April, and then dropped in May. (4)
Mortgage rates were down slightly in the last week. Freddie Mac says the 30-year fixed-rate mortgage slipped 3 basis points to 2.96%. The 15-year was down 4 points to 2.23%. (5)
In other news making headlines…
$1.9 Trillion in New Homeowner Equity
June is National Homeowners Month, and U.S. homeowners have something to celebrate. (6) According to CoreLogic’s latest Home Equity Report, homeowners with mortgages have enjoyed a 19.6% year-over-year increase in their equity. That represents an average yearly gain of $33,400 per homeowner, and a total gain of more than $1.9 trillion. (7)
CoreLogic’s chief economist, Dr. Frank Nothaft, says: “Double-digit home price growth in the past year has bolstered home equity to a record amount. This reduces the likelihood for a large number of distressed sales of homeowners to emerge from forbearance later in the year.” Instead of letting their homes go into foreclosure, they are more likely to sell their homes and pay off the loan.
The first quarter report shows that loans with negative equity decreased 7% to 1.4 million homes. That’s about 2.6% of all homes with a mortgage.
Turkey Leads for Global Price Growth
Home prices around the globe have been rising at their fastest pace since 2006. A report from Knight Frank shows they were up 7.3% year-over-year in March. And the country at the top of that list is Turkey at around 32%. New Zealand is second with a 22% increase, and is followed by the U.S. and Sweden at 13%, Austria at 12%, and Canada at 11%. (8)
Frank Knight says it is “not” a global boom, however, because many countries are seeing modest price growth, and four are seeing price declines. Home prices in Malaysia, Morocco, India, and Spain are down between about 1 and 2% year-over-year.
“The House that SHE Built”
The so-called “House the SHE Built” is making a debut at Utah’s annual Parade of Homes. The 3,200-square foot custom-home was designed and built by an all-female construction team. It began as a local project in Sarasota Springs to encourage more women to take this career path, but grew into a national event that attracted women from across the country including engineers, designers, architects, landscapers, and skilled workers. Many provided the materials and the labor for free or at cost. (9)
Proceeds from the sale of the home will be used in a number of ways to help women pursue a construction industry career. Some will go toward scholarships, while other funds will go toward charitable organizations geared to help women and educational events that teach young girls about home building opportunities.
Check the show notes for links to further information about these stories at NewsForInvestors.com.
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7 - https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-rising-home-equity-data-for-2021-corelogic-2021-housing-data-frank-martell-frank-nothaft-coronavirus-pandemic-impact-home-prices-in-2-12564.php
8 - https://www.worldpropertyjournal.com/real-estate-news/turkey/istanbul-real-estate-news/real-estate-news-global-home-price-growth-in-q1-2021-knight-frank-global-home-price-index-for-2021-turkey-property-news-covid-pandemic-impact-on-globa-12556.php