Silicon Valley Real Estate Market Update 5-18-2023
Here's the weekly round-up of news. Check it out, save it for later, and/or share it with your friends.
IMF warns of 'serious repercussions' of U.S. default The U.S. and global economies will experience "very serious repercussions" if the U.S. defaults on debt, according to the International Monetary Fund. "For that reason, we again are calling on all of the parties to come together, reach consensus and resolve the matter as quickly as possible," IMF spokesperson Julie Kozack says. Full Story: Reuters (5/11)
Yellen to meet top bankers to discuss debt ceiling Treasury Secretary Janet Yellen plans to meet Bank Policy Institute board members, including Citigroup CEO Jane Fraser and JPMorgan Chase CEO Jamie Dimon, for talks on the the current debt ceiling situation, with the possibility of a government default on its debts looming closer. Meanwhile, a key meeting on the issue between President Joe Biden and congressional leaders, scheduled for today, has been postponed. Full Story: Reuters (5/11), Politico (5/11)
What the great wealth transfer means for the U.S. Total family wealth in the U.S. has reached $140 trillion, and baby boomers control about half of that tally, setting the stage for a massive wealth transfer that will be distributed unevenly to younger generations. Much of the money will be transferred within the top 10% of households, and the trend toward "giving while living" means that the trend is already unfolding. Full Story: The New York Times (5/14)
Fed, FDIC look at banks' interest-rate risk management Banks have been receiving queries from the Federal Reserve and the Federal Deposit Insurance Corp. regarding interest-rate risks and exposure to commercial real estate, as the Fed and FDIC seek to strengthen safeguards and prevent further bank collapses, said people with knowledge of the situation. "Deposit volatility is higher than we thought because we never saw what fast interest-rate increases can do in a world where information on banks is so much easier to act upon by the depositors," said Georgetown University professor Sandeep Dahiya. Full Story: Bloomberg (5/15)
Q1 sees record-high $17T in consumer debt Federal Reserve data shows total consumer borrowing surpassed $17 trillion in the first three months of the year, marking a record high and rising about $150 billion from the prior quarter. The total rose despite a decline in new mortgage originations, which fell to $323.5 billion, the smallest amount since Q2 of 2014. Full Story: CNBC (5/15)
Pets do not escape housing crisis struggle The inability of people to afford housing is also driving an increase in the number of abandoned pets, as many landlords do not allow pets, Annoula Wylderich writes. Full Story: Las Vegas Sun (5/17)
Pets do not escape housing crisis struggle The inability of people to afford housing is also driving an increase in the number of abandoned pets, as many landlords do not allow pets, Annoula Wylderich writes. Full Story: Las Vegas Sun (5/17)
NAR, others weigh in on Supreme Court hearing The National Association of REALTORS®, the National Association of Home Builders and the Mortgage Bankers Association have sent a joint amicus brief to the Supreme Court ahead of its hearing on the Consumer Financial Protection Bureau's constitutionality, making the point that ruling against it would have severe repercussions for them. Expressing a wish "to highlight the potentially catastrophic consequences that a decision drawing those rules into doubt could have on the mortgage and real-estate markets," the brief states that a move that would affect current CFPB regulations "could lead to immediate and intense disruption to the housing market, harming both consumers and the broader economy." Full Story: HousingWire (5/16)
Market Update Despite encouraging news on inflation dropping to the lowest level in nearly two years, both consumers and business owners continued to grow more pessimistic about the economic outlook. Debt ceiling, bank failures, recession fears, and persistent inflation remained some of the economic concerns that lowered the public sentiment. While the strength in the labor market has continued to support households’ finances and helped mortgage delinquencies to reach the second lowest level since 1979, high costs of borrowing and affordability constraints continued to hurt the overall homebuying sentiment. Full Story CAR Market Minute Write Up
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