What I’m Reading
Thin Air: Mortgage payments are getting more unaffordable as record home price growth erases savings delivered by historically low interest rates. Wall Street Journal The affordability problem will continue to get worse if / when interest rates continue to rise. Borrowers have record equity in their homes and exploding pick a payment loans are no longer a thing so I do not believe that a major price correction is in the cards without a catalyst to force sales. The result: marginal buyers become renters, putting continued upward pressure on rents.
Downshifting: With homes setting record prices and little inventory available, buyers are once again setting their sights on condos and townhomes as a relatively more affordable option for housing in good locations. As a result, sales – which lagged single family homes for much of 2020 – are soaring. Realtor.com
Change Out: Developers have been successfully converting struggling retail centers to logistics uses in recent years. Now they are doing the same thing to with office buildings. Bisnow
Tight Fisted: When Congress considered a massive COVID-19 relief package earlier this year, hundreds of mayors from across the U.S. pleaded for “immediate action” on billions of dollars targeted to shore up their finances and revive their communities. Now that they have received the requested money, they aren’t even spending it. According to an Associated Press review of financial reports, so far states had spent just 2.5% of their initial allotment while large cities spent 8.5%. Associated Press
Bright Spot: National demand for office is still negative but new product is outperforming according to a new report from Cushman & Wakefield. Globe Street
Chart of the Day
The Treasury market is taking the risk of debt ceiling-related default seriously.
Source: The Daily Shot
WTF
Mail Order: A man was sentenced to 22 years in federal prison after being convicted of having boxes of methamphetamine shipped to his home because Florida. NBC 2
Rough Night: A drunken Turkish man who had been reported missing joined his own search party and spent several hours searching for himself. (h/t Adam Siegel) Yahoo! News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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