What I’m Reading
Rush Hour: Buyers are scrambling to purchase homes while rates are still low. In the meantime, supply is down substantially. As a result, buying has become even more competitive, especially at lower price points leaving prospective homeowners stuck between soaring rents and unobtainable ownership. CNBC
Widening Out: Rising treasury rates have gotten a lot of attention of late. However, the spread between treasury yields and mortgage bonds is also widening, making home ownership even more expensive as the Fed winds down its MBS purchases. The result? Far less refinancing volume, less sales from owners who already enjoy low fixed rates and continued upward pressure on rents. Wall Street Journal
Ring Fenced: The Evergrande blowup is an overleveraged catastrophe but the fact that the vast majority of creditors are domestic helps to explain why the massive default hasn’t yet spread outside of China. Commercial Observer
Wait and See: The office market is still facing a lot of uncertainty in early 2022. Despite vacancy seeming to have topped out at 18.5% nationally, the sector has experienced five straight quarters of negative effective rent growth. Globe Street
Boomtowns: Crypto mining is driving demand for large buildings in rural areas of states with cheap electricity. Bisnow
Chart of the Day
Market-based inflation expectations have diverged from crude oil prices. This is not sustainable. Something has to give.
Source: The Daily Shot
WTF
Tipping the Scale: An airline pilot who won a ticket to be on the first SpaceX tourist launch last year gave it to his roommate since he exceeded the weight limit because Florida. NBC News
Food Fight: A massive brawl broke out in a Pennsylvania Golden Corral restaurant after a diner allegedly became enraged when the all-you-can-eat buffet ran out of steak. (h/t Steve Sims) CBS 3 Philadelphia
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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