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Inflation Is Top Concern Among Americans As COVID Takes Last Place

Inflation Is Top Concern Among Americans As COVID Takes Last Place

A new survey from Pew reveals that inflation is the top concern Among Americans,…

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Inflation Is Top Concern Among Americans As COVID Takes Last Place

A new survey from Pew reveals that inflation is the top concern Among Americans, while COVID-19 has fallen to last place.

70% of Americans polled between April 25 and May 1 said inflation was a "very big problem," while 23% said it was a "moderately big problem."

Meanwhile, just 19% said Covid was a "very big problem," while 31% said it was a "small problem." 12% said Covid was "not a problem at all."

Oddly, Pew didn't ask about the war in Ukraine.

When broken down by political party, inflation is the top national problem according to Republicans, while Democrats are mos concerned about gun violence, healthcare affordability and climate change.

"Democrats are nearly four times as likely as Republicans to rate climate change as a very big problem (63% vs. 16%)," Pew reports. "Republicans, by contrast, are far more likely than Democrats to view illegal immigration as a very big problem (65% vs. 19%)."

Caring less and less

Over time, Americans have been caring less about Covid, unemployment, and racism.

It will be interesting to see what's bothering Americans most in the next Pew poll, which will undoubtedly include a question on Roe vs. Wade in light of the leaked Supreme Court decision. For now, however...

Tyler Durden Sun, 05/15/2022 - 15:10

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Economics

The Best Cities to Buy a Starter Home

Competition for starter homes is intense. What’s a buyer to do? Look to these cities to break into the real estate market.

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Competition for starter homes is intense. What's a buyer to do? Look to these cities to break into the real estate market.

Who wants to buy a home? A lot more people than there are homes to buy, and the outlook for first-time buyers is particularly grim.

About 26 million Americans plan to buy a home in the next 12 months, but just 5-6 million homes were sold in each of the past five years, according to a NerdWallet survey conducted in December 2021.

Millennials, aged about 26-41 years, are the largest group trying to buy homes, about 37%, according to the National Association of Realtors, and first-time buyers made up 31% of all home buyers. The supply of starter homes decreased by more than half from 2017-2021, according to an analysis by Realtor.com, which defined starters as single-family homes, condos, and townhomes under 1,850 square feet.

While median monthly asking rent in the U.S. surpassed $2,000 in May, the national median sale price topped $431,000, according to Redfin data.

And it’s not just low inventory and high prices, the competition is fierce for first-time homebuyers. Urban renters headed for the suburbs during the pandemic to compete for those entry-level homes, baby boomers looking to downsize also go after smaller properties, and to make matters worse, first-time home buyers must compete with investors who pay cash to fix and flip homes. These cash-rich flippers now make up about 10% of homebuyers

Lastly, builders have largely been unable to offset the decline in starter homes.

For the house hunter who still has the moxie to try, turn to this list of cheapest cities to buy a home. To find the cheapest places for homebuyers and the best places for starter homes, StorageCafe, an online platform that provides storage unit listings across the nation, looked at data from 108 U.S. cities with populations ranging from 90,000 to 8 million. The metrics include property values, number of sales between 2015 and 2021, housing affordability, cost of living, unemployment rate, homebuyers’ ages, the ratio of renters to owners, income levels, FHA lending limits and average mortgage rates. They scored each city on these metrics then ranked them based on their potential with regard to starter homes.

Here are the best cities for first-time homebuyers:

1. Fort Wayne, Ind.

  • Median property value: $113,144
  • Cost of living index: 87
  • Homebuyers' age: 35
  • 2021 average mortgage rate: 3.14%

The analysis used average mortgage rates from 2021, and rates have since gone up, hovering near 6% in June, but last year's rates might still give you a sense of where rates tend to be lower.

2. Columbia Md.

  • Median property value: $264,055
  • Cost of living index:106
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

3. Pittsburgh

  • Median property value: $170,042
  • Cost of living index:104
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.03%

Shutterstock

4. Fishers, Ind.

  • Median property value: $258,679
  • Cost of living index: 92
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.14%

5. Columbus, Ohio

  • Median property value: $164,229
  • Cost of living index: 92
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.16%

aceshot1 / Shutterstock

6. Carmel, Ind.

  • Median property value: $244,670
  • Cost of living index: 104
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.01%

7. St. Paul, Minn.

  • Median property value: $286,151
  • Cost of living index: 92
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.14%

8. Cary, N.C.

  • Median property value: $308,611
  • Cost of living index: 94
  • Homebuyers' age: 43
  • 2021 average mortgage rate: 3.02%

9. Manchester, N.H.

  • Median property value: $276,257
  • Cost of living index: 111
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.03%

10. Minneapolis

  • Median property value: $288,926
  • Cost of living index: 105
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.01%

11. Nashville, Tenn.

  • Median property value: $318,046
  • Cost of living index: 93
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.02%

f11photo / Shutterstock

12. Bakersfield, Calif.

  • Median property value: $216,063
  • Cost of living index: 102
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.04%

13. Arvada, Colo.

  • Median property value: $476,672
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

14. Alexandria, Va.

  • Median property value: $432,703
  • Cost of living index: 137
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 2.99%

Shutterstock

15. Centennial, Colo.

  • Median property value: $444,747
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

16. Denver

  • Median property value: $505,777
  • Cost of living index: 113
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

17. Raleigh, N.C.

  • Median property value: $279,304
  • Cost of living index: 94
  • Homebuyers' age: 43
  • 2021 average mortgage rate: 3.02%

18. Germantown, Md.

  • Median property value: $261,511
  • Cost of living index: 157
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

19. St. Petersburg, Fla.

  • Median property value: $283,684
  • Cost of living index: 96
  • Homebuyers' age: 53
  • 2021 average mortgage rate: 3.11%

20. Lakewood, Colo.

  • Median property value: $380,165
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

21. Aurora, Colo.

  • Median property value: $360,542
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

22. Boca Raton, Fla.

  • Median property value: $280,104
  • Cost of living index: 116
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.11%

23. Modesto, Calif.

  • Median property value: $319,328
  • Cost of living index: 119
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.04%

Shutterstock

24. Chandler, Ariz.

  • Median property value: $388,450
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

Shutterstock

25. Las Vegas

  • Median property value: $265,170
  • Cost of living index: 107
  • Homebuyers' age: 50
  • 2021 average mortgage rate: 3.11%

26. Washington, D.C.

  • Median property value: $623,135
  • Cost of living index: 157
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 4.90%

27. Scottsdale, Ariz.

  • Median property value: $478,609
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

28. Spokane, Wash.

  • Median property value: $300,881
  • Cost of living index: 107
  • Homebuyers' age: 44
  • 2021 average mortgage rate: 3.06%

29. Peoria, Ariz.

  • Median property value: $373,588
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

30. Gilbert, Ariz.

  • Median property value: $409,324
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

31. Portland, Ore.

  • Median property value: $484,475
  • Cost of living index: 132
  • Homebuyers' age: 44
  • 2021 average mortgage rate: 3.08%

Check out how all 108 cities ranked and see the methodology for this study at StorageCafe.com

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Bonds

Off Campus Texas A&M Housing With “Resort Style” Rooftop Pool Defaults On Debt Payment

Off Campus Texas A&M Housing With "Resort Style" Rooftop Pool Defaults On Debt Payment

Who could have possibly thought, amidst all this…

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Off Campus Texas A&M Housing With "Resort Style" Rooftop Pool Defaults On Debt Payment

Who could have possibly thought, amidst all this euphoria, that luxury college housing complexes for students might not be the best idea in the world?

It's looking like for one complex - with, of course, a "resort style" rooftop pool (which everybody knows is integral to ones studies) - near the Texas A&M University campus is starting to find out this harsh reality. 

The 3,400-bed student housing complex, called Park West, is going to default on its July debt payment according to Moody’s Investors Service, who downgraded the company's bonds deeper into junk territory this week.

The property, which provides off-campus housing for students, is located in College Station, Texas, Bloomberg reported in a mid-week wrap up. It has reportedly been struggling since even before the pandemic, thanks to the building's higher rents.

Moody's commented: “The project’s financial distress is directly linked to prolonged weakness within its College Station, Texas student housing submarket which has been an ongoing problem since Park West opened for fall 2017.”

$15.3 million is due in principal and interest, but the complex will only pay $8.5 million. The company that sold the bonds, NCCD-College Station Properties LLC, still has about $342 million in bonds outstanding, Bloomberg reported. 

The vice president and director of operations for the company confirmed that the company would default but offered up no other color. 

For a look at the complex's posh amenities, you can review its website here. 

Tyler Durden Fri, 07/01/2022 - 21:55

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Economics

How sharp will be the global slowdown?

The Russian Federation’s invasion of Ukraine was yet another supply shock to a global economy still reeling from the consequences of the COVID-19 pandemic….

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By Justin Damien Guénette

The Russian Federation’s invasion of Ukraine was yet another supply shock to a global economy still reeling from the consequences of the COVID-19 pandemic. According to the June 2022 edition of the Global Economic Prospects report, global growth is projected to slow sharply from 5.7 percent in 2021 to 2.9 percent this year (Figure 1). The effects of the invasion account for most of the 1.2 percentage point downward revision to this year’s global growth forecast. Growth in emerging market and developing economies (EMDEs) is expected to slow from 6.6 percent in 2021 to 3.4 percent in 2022 due to negative spillovers from the war in Ukraine and a deteriorating global environment. Other than the pandemic-induced recession in 2020, this is the weakest year of EMDE growth since 2009.

Arrayed against this baseline of sharply diminishing global growth are various overlapping and mutually reinforcing downside risks, including intensifying geopolitical tensions, rising financial instability, and continuing supply strains. Three of these, which are discussed and quantified in the sub-sections below, may already be materializing. If these shocks materialize at the same time, they could lead to a much sharper global slowdown in 2022-23 than projected in the baseline.

Figure 1. Global growth

Source: World Bank.
Note: EMDEs = emerging market and developing economies. Bars show cumulative output losses over 2020-24, which are computed as deviations from trend, expressed as a share of GDP in 2019. Output is measured in U.S. dollars at 2010-19 prices and market exchange rates. Trend is assumed to grow at the regression-estimated trend growth rate of 2010-19. EMDE commodity exporters exclude the Russian Federation and Ukraine.

Rising financial stress

Relentless inflationary pressures have led to chaotic repricing of monetary policy expectations across the world. Prior to June, markets were pricing in an increase in the U.S. Federal Funds rate to 2.5 percent by end-2022. Barely a few short weeks later, in response to another inflation surprise—total CPI inflation reached 8.6 percent year over year in May—end-2022 expectations surged above 3 percent (Figure 2). Similar revisions have beset other major central banks, sending stock markets plunging amid sustained equity volatility. In turn, EMDE financial conditions have reached their tightest level since the start of the pandemic. Sovereign spreads have increased steadily across EMDEs, particularly in commodity importers, where debt service may be increasingly strained (Figure 3).

Figure 2. Market-based expectations of Fed policy rates

Figure 2: Market-based expectations of Fed policy ratesSources Bloomberg; World Bank.
Note: Figure shows changes in market-based expectations of monetary policy rates over time. “Dec-21” refers to December 21, 2021. “May-22” refers to May 26, 2022, and “Jun-22” refers to June 28, 2022.

Figure 3. Changes in EMDE sovereign spreads by commodity exporter status

Changes in EMDE sovereign spreads by commodity exporter statusSources: J.P. Morgan; World Bank.
Note: Figure shows the difference in bond spreads between the latest available data and February 23, 2022 (day prior to the invasion of Ukraine). Last observation is June 24, 2022.

Expectations of faster monetary tightening in the United States could trigger financial stress in EMDEs starting in the third quarter of this year. In this scenario, the Federal Reserve would see no choice but to raise the policy rate to 4 percent by the first quarter of 2023, causing a sharper tightening of EMDE financial conditions. Several major EMDEs would experience large-scale capital outflows and soaring bond spreads, ultimately forcing authorities to accelerate fiscal consolidation efforts. Global growth would be reduced by 0.3 percentage point in 2022 and a further 0.6 percentage point in 2023 compared to current baseline forecasts. EMDEs would be disproportionately affected, with their aggregate growth reduced by 0.5 percentage point in 2022 and 0.9 percentage point in 2023.

Disruptions in energy markets

The war in Ukraine has caused significant supply disruptions and higher price volatility across several commodities, including energy, food, and fertilizers. There are many possible triggers for further upward movements in energy prices. These are all driven by the Russian invasion of Ukraine and could include an immediate ban by Russia on all energy exports to EU members, additional G-7 sanctions targeting shipping companies, and the possibility of secondary sanctions on third parties purchasing Russian energy supplies.

In a scenario of additional major disruptions to energy markets centered around Europe, the prices of natural gas, oil, and coal could spike in the third quarter of 2022 and remain elevated over the remainder of the scenario horizon, reflecting both precautionary buying and lower global supplies. Growth would slow sharply in advanced economies—particularly in the euro area—while EMDEs would face notable headwinds from higher energy prices and weaker foreign demand. On net, global growth could be reduced by 0.5 percentage point in 2022 and a further 0.7 percentage point in 2023.

Recurring lockdowns in China

Economic activity in China is recovering from the deep disruptions caused by strict lockdowns in response to large-scale outbreaks of COVID-19. But the country could experience renewed pandemic disruptions. This possibility of recurring pandemic lockdowns in China is explored in a third risk scenario for global growth. Large-scale COVID-19 resurgences would trigger intermittent lockdowns all the way through 2023, reducing growth in China by 0.5 percentage point in 2022 and a further 0.3 percentage point in 2023. Global spillovers would be modest, unlike in the first two scenarios, but the risks of prolonged disruptions to global supply chains would increase substantially.

Possibility of a sharp global downturn with three shocks

The simultaneous materialization of all three scenarios presented above could reduce global growth to only 2.1 percent in 2022 and 1.5 percent in 2023—0.8 and 1.5 percentage points slower than in the baseline forecast (Figure 4). This would correspond to a sharp global downturn and effectively push the global economy to the brink of recession. The prospects of a dire global economic outcome, so soon after the pandemic global recession, could have devastating consequences for the world’s poor.

Figure 4. Global growth scenarios

Global growth scenarios

Sources: Oxford Economics; World Bank.
Note: Scenario outcomes produced using the Oxford Economics Global Economic Model. Scenarios are linearly additive.

Policies can help!

Even if several downside risks materialize, policymakers may be able to fend off the worst economic outcomes. At a national level, a forceful policy response would require an urgent reprioritization of spending toward targeted relief for vulnerable households, steadfast commitment to credible monetary frameworks, and a general restraint in the use of distortionary policies such as export restrictions and price controls. Once the global economy has stabilized, reversing the damage inflicted by the dual shocks of the pandemic and the war in Ukraine will require an unwavering commitment to growth-enhancing policies, including large-scale investment in education and digital technologies, and the promotion of labor force participation—especially female participation—through active labor market policies.

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