Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.
Thursday, the Dow Jones industrial average fell 253.25 points, or 1.4%, to 17,495.84. The Standard & Poor’s 500 index lost 31.18 points, or 1.5%, to 2,041.89. The NASDAQ composite declined 68.58 points, or 1.4%, to 5,002.55.
U.S. crude fell 57 cents, or 1.6%, to $34.95 a barrel in New York. Brent crude, a benchmark for international oils, fell 33 cents, or 0.9%, to $37.06 a barrel in London. The price of wholesale gasoline rose 2.9 cents, or 2.3%, to $1.262 a gallon in New York. Heating oil slipped 0.7 cents to $1.105 a gallon. Natural gas, which has fallen to 16-year lows, gave up another 3.5 cents, or 2 per cent, to $1.755 per 1,000 cubic feet.
Average US rate on 30-year mortgages rises to 3.97 per cent — Average long-term U.S. mortgage rates rose slightly this week in the days before the Federal Reserve announced a historic increase in its key short-term interest rate. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage edged up to 3.97% from 3.95% a week earlier. The average rate on 15-year fixed-rate mortgages increased to 3.22 per cent from 3.19%. (AP)
Fewer Americans filed for unemployment aid last week — Fewer Americans applied for unemployment claims last week, another sign of strength in the job market. Weekly applications for unemployment benefits fell 11,000 last week to a seasonally adjusted 271,000, the Labor Department said Thursday. The less volatile 4-week average was essentially unchanged at 271,000. The numbers show that most American workers are enjoying job security. (AP)
Federal Reserve Embarks on Historic New Era of Higher Interest Rates “The Federal Reserve raised interest rates for the first time since 2006, ending what Chairwoman Janet Yellen called an “extraordinary period” in which the bank sought to revive the economy in the aftermath of the Great Recession. Policy makers on Wednesday voted 10 to 0 to lift the Fed’s short-term borrowing rate by a quarter-point to a range of 0.25% to 0.5%.” (MarketWatch)
Congress Extends EB-5 ‘Visa for Investment’ Policy until Sept. 30 “The controversial EB-5 visa-for-investment program will be extended, with no changes, to Sept. 30 as part of the omnibus spending bill Congress agreed on Tuesday night. The program lets foreigners get a green card for themselves and their families if they invest at least $500,000 or $1 million (depending on the area) in a business that creates or preserves at least 10 jobs for U.S citizens or permanent residents.” (San Francisco Chronicle)
Why the Fed Move Doesn’t Matter to Mortgage Rates “The Federal Reserve did it — raised the target federal funds rate a quarter point, its first boost in nearly a decade. That does not, however, mean that the average rate on the 30-year fixed mortgage will be a quarter point higher when we all wake up on Thursday. That’s not how mortgage rates work. Mortgage rates follow the yields on mortgage-backed securities. These bonds track the yield on the U.S. 10-year Treasury.” (CNBC)
Billionaire Sam Zell Says Recession Likely in the Next 12 Months “Billionaire investor Sam Zell said the U.S. economy could go into a recession in the next year and that an expected Federal Reserve interest-rate increase is coming at least six months too late. The central bank has been too cautious and the economy would already be adjusting if it raised rates six to nine months ago, giving Chair Janet Yellen ‘more room if a recession is on the way,’ Zell said Wednesday in an interview on Bloomberg Television.” (Bloomberg)
Rapid Reaction: 8 Top Economists Weigh In on Fed Rate Hike “In a long-awaited move, the Fed raised interest rates .25% today, up from rock-bottom levels. What does it mean for the market? Here are some of the country’s top economists’ immediate take on the decision.” (Bisnow)
U.S. Real Estate Could See More Foreign Investment Ahead “U.S. assets like real estate may be more attractive to foreign investors in the months ahead. In contrast to much of the industrialized world’s easy money policy, the Federal Reserve chose to tighten slightly with the start of a rate hike cycle on Wednesday. The divergence in monetary policy is seen as a potential source of volatility in the coming year. According to Mitch Roschelle, partner at PricewaterhouseCoopers, uncertainty in global currencies, stocks, and bonds could benefit hard assets like U.S. real estate.” (Yahoo Finance)
Hot Demand for New Luxury Condos is Reshaping San Francisco “San Francisco’s demand for new luxury condos remains strong and is a major market trend that is expected to continue. Fueled by the Bay Area’s thriving high-tech economy, this new construction is changing the landscape of the city. Nearly 2,700 for-sale condominiums have recently been completed, are under construction or are in the planning pipeline in San Francisco.” (MarketWatch)
Hilton Shares Jump 5.2% After Report of Spinoff Plan for Hotels “Hilton Worldwide Holdings Inc. shares jumped following a report that the world’s biggest lodging company plans to spin off its hotel properties into a real estate investment trust. Hilton has received the blessing of the Internal Revenue Service for the transaction, the Wall Street Journal reported Wednesday. Hilton, based in McLean, Virginia, didn’t immediately return phone calls and e-mails seeking comment.” (Bloomberg)
Your Landlord Wants a Cut of Your Airbnb Listing “Renters may soon be able to legally host Airbnb guests. The accommodations website is in talks with three of the country’s largest apartment operators to expand the service to renters in return for a cut of the revenue, the Wall Street Journal reports. Though many leaseholders already list their rooms, they risk eviction by doing so as it goes against many renter contracts. Considering renters’ already widespread use of the website, Airbnb spokesperson Christopher Nulty told Fortune in a statement, ‘It would be news if we weren’t talking to landlords.’” (Fortune)
In Their Own Words: Real Estate’s Top Dogs Sum Up 2015 and 2016 “There’s plenty in store for 2016, and we’re not just talking about the Olympics, the new Ghostbusters movie or the presidential election. We polled some of the top real estate industry officials—developers, brokers and business groups alike—to get their take on the last year and what we can look forward to in 2016. There was consensus that 2015 was a pretty strong year. But there’s a lot of disagreement on how the market will perform.” (Commercial Observer)