The Fed's Latest Move: A Death Sentence for the Housing Market

January 16, 2023

Rise and shine! It's a new day and The Shaker is here to serve you the best mix of residential real estate news. Yummy yummy.

What you should know:

Experts are warning that the US real estate market is in "big trouble" due to the Federal Reserve's hawkish market reset, which has led to rising interest and mortgage rates.
Pulte Capital CEO Bill Pulte says "Interest rates are like the mother's milk of housing. And if you cut it off, you're in big trouble. And when you've had these massive increases in interest rates, it just puts a lot of things to a stop."
KB Home, one of the nation’s largest homebuilders, released its Q4 report indicating more signs of housing weakness, with a 68% cancelation rate on new construction projects.
Mortgage rates have also increased, with the 30-year rate rising to 6.48% and the 15-year mortgage coming in at 5.73%.
Fed Chair Jerome Powell warns that raising interest rates to slow the economy "are not popular" in the short term, and could even create political opposition.
Pulte predicts that the real estate market will be tough and that earnings will continue to deteriorate.

More tasty news in this shake

Rent-al Roulette: The Rental Market's Uncertain Future

According to recent data, the rental market appears to be heading for a hard landing, with declining rents predicted for 2023.
Experts warn that this could have a significant impact on the pipeline of new supply for years to come.
The suddenness of the market's downturn is surprising, with new lease demand dropping for the first time since 2009.
Furthermore, developers and investors may not be prepared for a period of softness in the rental market and the increasing supply of apartment units that will be added to the market.

Selling the Invisible House: A-list appeal, but with a space-age price tag

The creators of Joshua Tree’s Invisible House are looking to sell their 5,500-square-foot, “2001: A Space Odyssey”-inspired estate for $18 million.
The estate features a fully reflective glass exterior, a prefab guest house, a 100-foot indoor “solar” pool and has been featured on Netflix’s “The World’s Most Amazing Vacation Rentals”.
The property, which is set on 90 acres of land, is being sold by Aaron Kirman and Matt Adamo of AKG Christie’s International Real Estate, and has previously been visited by celebrities such as Lizzo, Diplo, Lil Kim, and Demi Lovato.

Dialing for dollars: Keller Williams hit with hefty lawsuit

Keller Williams Realty, an Austin-based real estate franchisor, has agreed to pay $40 million to settle a class action lawsuit claiming that its agents made unwanted pre-recorded phone calls to consumers, some of whom were on the National Do Not Call Registry.
The lawsuit alleged that the cold-calling violated the Telephone Consumers Protection Act (TCPA), a 1991 law designed to protect consumers against unsolicited telemarketing calls.
Keller Williams also agreed to create a task force to ensure agents comply with the TCPA as part of the settlement.

Send us your feedback, ideas, love at [email protected]