top of page
Search
  • Writer's pictureCorey Cohen

Mortgage Rates Retreat from Recent Highs

This is Corey Cohen, founder of The Roebling Group, and here's a glimpse into last week's real estate news.


Positive Inflation Data Eases Investors

Equities markets posted strong gains this past week after reassuring inflation data was released


Specifically, the Producer Price Index dropped 0.5% on a monthly basis in October – the biggest drop since April 2020. Additionally, the Consumer Price Index showed that prices paid by consumers rose less than expected last month.


Together, the two reports should be encouraging to the Federal Reserve, which has been raising interest rates dramatically to try and tame inflation. 


Bottom line: This positive data could be a sign that the Fed will hold off on raising rates further for now.

The NAR’s Ongoing Legal Woes

The National Association of Realtors (NAR) is facing attacks from multiple angles. 


  • South Carolina: The NAR and Keller Williams Realty are being accused of breaking antitrust laws and driving up home prices. Plaintiffs are arguing that high commission rates and NAR rules lead to fixed pricing. The NAR insists its rules promote competition and transparency.  South Carolina folks want to turn this into a class-action lawsuit on behalf of all home sellers who have used Keller Williams and the NAR since November 2019. It's a mess, and the Justice Department is also thinking about getting involved.


  • Missouri: The South Carolina lawsuit comes after a similar case in Missouri, where the NAR was found guilty and might have to pay a whopping $5.3 billion in damages. The $1.8 billion jury verdict in Missouri, which the NAR is appealing, could lead to significant changes in how real estate transactions work. 


In other NAR news, a significant jury trial in Kansas City is challenging broker fees – particularly, the seller's payment to the buyer's agent – and it could reshape the real estate market. 


Under the current system, the seller is required to pay a fee to the buyer’s realtor under NAR regulations. But, this fee is not always transparent and has been accused of keeping home prices artificially inflated. Advocates are pushing for changes, such as decoupling fees and having buyers pay agents directly. 


The outcome of this trial will likely impact how Americans buy houses and challenge the longstanding practices in the real estate industry.

The White House’s Plan To Create Affordable Housing 

The White House has a plan to help reduce the housing unaffordability crisis – turn empty offices into apartments.


Thanks to the rise of remote work, there are now many vacant offices scattered across the US. At the same time, rents across the country have soared. The U.S. government’s plan is to convert these empty offices into housing by giving property owners money and assistance. 


Notably, this announcement does not come with any fresh funding. But, the Department of Transportation will make projects near public transit eligibility for below-market financing programs. Additionally, the Department of Housing and Urban Development will also deploy capital to convert buildings.


This way, it will be easier for property owners to make these changes while also making homes more affordable – hopefully.

Mortgage Demand Hits 5-Week High

The average interest rate for 30-year fixed-rate mortgages was sitting at 7.61% in the week ended November 10, 2023, according to the Mortgage Bankers Association. This represents a mild drop from the high of 7.9% that mortgage rates hit just a few weeks earlier. As a result, demand for mortgages spiked slightly over the past week.


Last week, applications for a new mortgage to purchase a home were up 3% on a weekly basis. Additionally, applications to refinance a home spiked 2%.

Rapid-Fire Headlines

  1. WeWork’s bankruptcy will likely worsen America’s office-building crisis. The coworking company’s 600 office leases will likely sit vacant as the company works through the bankruptcy process.

  2. WeWork plans to cancel leases for 40 office buildings in New York City. If approved, this move could force the city’s biggest landlords to swallow millions in losses while finding new tenants. 

  3. Rents in Manhattan have dropped for the second month in a row. This mirrors a national trend of slowing annual rent growth.

  4. A "silver tsunami" of baby boomers downsizing is expected to hit the housing market. Predictions show that 51% of people over 50 will downsize to smaller homes, bringing more than 30 million housing units to the market. 

Have a question about buying or selling real estate in NYC? Please feel free to book an appointment with me here for a consultation. 


Best,

Corey Cohen

Founder

The Roebling Group

646.939.7375

@mrcoreycohen

23 views0 comments

Comments


bottom of page