Economic News We start with very little economic news from last week, but the government ...
Original publication date on the United States Real Estate Forum on Facebook:
2019-02-14T23:42:03+0000
Economic News
We start with very little economic news from last week, but the government is still at risk of shutting down second parts on border wall financing. President Trump threatened to shut down if the deal was not reached by February. He also said he could declare a national emergency to get the money he wanted for the wall. Politico reports that he does not have enough GOP support to do either.
According to a Wall Street Journal poll, 59 percent or participating economists believe further shutdowns will hurt economic growth. 16% believe this will have a "significant" effect. The chief economist at the American Chemical Council, Thomas Quinn Swift, told WSJ: "Extinguishing another will seriously damage consumer and business confidence."
President Trump met with Fed chief Jerome Powell to talk about the economy's performance. The meeting was held at dinner after months of criticism by the president of the central bank's decision to raise the short-term interest rate. It is also rare that the two would meet, to avoid any appearance of government influence on Federal Reserve decisions. Bloomberg reports that Powell does not discuss monetary policy with the president. He merely reiterated what he was given publicly - that any additional interest rate hikes would be based on economic data.
Mortgage rates
Long-term mortgage rates fell at the NNNUM base points to the lowest level in 5 months. Freddie Mac says that a fixed-rate mortgage of 10 a year stands at 30%. This is good news for home buyers as we head into the spring home buying season.
In other news making headlines…
Great drop in homes sold above ad price
Zillow reports a large drop in the number of homes sold above the listing price. That means only 19% of sales were above the listing price in December. It is the lowest level in two years.
Zillow said the decline is due to a larger stock of homes for sale, as well as higher mortgage rates. Zillo senior economist Aaron Terrazas said in a press release, “Something has changed in the middle of the summer. Sellers sitting on the sidelines joined in, increasing inventory. The balance of power has begun to push margins back to buyers - especially in higher-priced communities. ”
He also said, it's too early to call it a buyer's market. He says it's just that they "no longer fight each other with teeth and nails to get in the door."
Three 2018 tax breaks in Limbo
Taxpayers who try to get their yields quickly can be delayed by three 2018 tax breaks that have not yet been approved by Congress. Mortgage insurance deduction is one of them, along with debt forgiveness for foreclosures, as well as tuition and higher education fees.
They are temporary tax breaks that need to be licensed every year. As CNBC reports, taxpayers who need these deductions may want to hold their yields, or file now with plans to submit a revised yield later.
The elderly blame the shortage of housing
Freddie Mack blames seniors for housing shortages. That is, seniors who are "aging in place" keep 1.6 million homes out of the market. Freddie Mac Chief Economist Sam Khater says this will increase rental demand, and the need for new residential construction.
He said "1.6 million units is about the same number of single-family residential units built each year, and represents more than half of the current 25 million housing shortfalls." Things get worse as another baby boomers retire, and stay in their homes.
A large increase in wealthy employees
It's not just young people who rent out in the US. RentCafé says people earn $ 150,000 a year or more to account for the fast-growing tower of new tenants. That means more than 1.35 million of them became renters during the ten-year period 2007-2007. This represents a 175% increase. (2)
But, why do they rent if they can afford to buy homes? RentCafé says, it could be because of the new Millennial lifestyle selection that rental provides more flexibility. Or maybe it's because of thinking that grew out of the housing crisis. Whatever the reason, more and more people with large salaries, they also write tests rent.
People have escaped high taxes for Florida
New home search data suggests, many wealthy people are moving away from high-tax states like New York because of changes in the 2007 tax law. New rules reduce the amount you can deduct from mortgage interest and state taxes, also known as SALT deductions. The Realtor.com search data, cited by the Wall Street Journal, shows the top 10 districts with the largest increase in searches for expensive homes in Florida are from places with a more efficient real estate tax rate than Florida.
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Most Economists Say Fresh Government Shutdown Would Hurt US Growth
More than 58% of private-sector economic forecasters say a fresh government shutdown would take a toll on US economic growth as well as business and consumer sentiment.
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