Rising mortgage rates, rising foreclosure rates, and Bad Bunny’s rather pricey rental unit. From the wild and wooly world of real estate, here are our hits and misses for the week of Oct. 9-13.
Miss: Up, Up and Oh No. The 30-year fixed-rate mortgage surged higher this week, averaging 7.57% as of Oct. 12 – it averaged 7.49%, and a year ago at this time it averages 6.92%. Sam Khater, Freddie Mac’s chief economist, presented these numbers by stating, “The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints.” Well, Khater got it half right – “significant affordability constraints” continue to hinder the market, but the only reason incomes are growing is because more people are working two jobs in order to keep up with the elevated cost of living that has become the hallmark of Bidenomics.
Hit: What Took You So Long? Earlier this week, the leadership of the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors sent a joint letter to Federal Reserve Chairman Jerome Powell warning that “ongoing market uncertainty about the Fed’s rate path is contributing to recent interest rate hikes and volatility.” Ideally, the trade groups should have stepped forward some time ago to tell Powell he was on the wrong path – their delay in speaking out is puzzling. Still, they said what needed to be said by the industry’s leaders, and the letter was a good example of being better late than never.
Miss: Reason for Concern? A total of 124,539 residential properties carried foreclosure filings during the third quarter of this year, according to new data from ATTOM. This is up 28% from the second quarter and up 34% from one year ago. Rob Barber, CEO at ATTOM, noted that the “rise in foreclosures might also be attributed to pending filings finally processing,” but he also admitted it was “evident that some homeowners are still grappling with the pandemic’s financial aftermath or encountering new challenges.” You just can’t spin this data into copacetic feel-good story.
Hit: Score a Big One for Rental Housing. Puerto Rican music star Bad Bunny is currently residing in a penthouse in a luxury complex in Manhattan’s ritzy West Chelsea neighborhood. According to Architectural Digest, the four-bedroom, four-and-a-half-bathroom duplex is reportedly on the market for sale at $18.5 million – but Bad Bunny isn’t buying it. Instead, he is renting the penthouse for $150,000 per month. Hey, it’s good to be Bad Bunny, and even better being the broker who coordinated that lease.
Hit: Score a Big One for Homeownership. Amazon founder Jeff Bezos isn’t one for rental housing – he prefers to own his residence. Or, to be more precise, residences. Bloomberg reported that Bezos recently paid $79 million for a mansion in South Florida. And he didn’t have to look far to find that dream house because it happens to be next door to the $68 million mansion he bought in June. Bezos also owns properties in Beverly Hills, Maui and Washington, D.C. Maybe Bezos knows something that Bad Bunny doesn’t?
A Closing Thought: Last Saturday’s brutal assault by Hamas terrorists – not “militants,” but terrorists – against their Israeli neighbors was an obscenity of unfathomable depravity. In this 75th year of the founding of the State of Israel, it is astonishing that efforts are still being made to eradicate this democracy from its rightful place in the Middle East. As the Holy Land becomes the setting of a new war, I hope that the words of New York’s Cardinal Timothy M. Dolan will be recalled by those capable of listening to the voice of reason: “A secure and safe home (is) surely intended by God for all His Children, wherever they may be.”
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].