The Fed approved a 0.25 percentage point rate hike, sees six more ahead. This is the first interest rate hike in more than three years since December 2018. Officials indicated an aggressive path ahead, with increases coming at each of the remaining six meetings in 2022. Members also pared expectations for economic growth this year and sharply raised their outlook for inflation. Read more here.
Second-home market hit hard as demand jumps for primary homes. For the first time since the beginning of the pandemic, demand for primary homes actually outpaced that of vacation homes slightly, with mortgage-rate locks on primary residences up 36 percent from pre-pandemic levels. Rising mortgage rates, combined with rising home prices, are hitting the second-home market much harder than the primary home market.
Homebuilders’ sales expectations drop dramatically, as mortgage rates soar. Builder sentiment in the market for single-family homes dropped 2 points to 79 in March on the National Association of Home Builders/Wells Fargo Housing Market Index. Sales expectations in the next six months declined a steep 10 points to 70. The expectations of higher interest rates are hitting homebuilders harder.
Properties near rail stations now trade at a discount. The shift to work-at-home is so pronounced that the number of commuters on any given day is likely to decrease. In New York City, there was a discount rather than a premium associated with properties near rail stations. That’s according to an analysis conducted by economists at Barclays.
U.S. retail sales rose at a slower-than-expected pace in February. Rising inflation catches up to consumers’ pockets and is starting to curb spending. Seasonally adjusted retail sales rose by 0.3% to $658.1 billion from January and 17.6% year over year. A Bank of America analysis of credit and debit data suggested that higher prices at the pump could be drawing consumers away from spending.
Import prices jump 10.9% in the past year, adding to high U.S. inflation. The cost of imported goods such as oil, grains, and autos jumped 1.4% in February. Import prices also surged 1.9% in the prior month. The back-to-back increases in import prices are the largest in 11 years. Inflation is likely to remain high through the spring, especially after the Russian attack on Ukraine drove up the prices of oil, wheat, and other commodities. Read more here.
Open houses are roaring back this spring. There has been a marked uptick in open houses in recent weeks, from 11 percent of home listings in December to 16 percent in February. That’s a major gain on the same period last year when open houses only rose from 8 percent of listings to 9 percent. While open houses are nearing their pre-pandemic levels, they have yet to eclipse that mark nationwide.
WHAT TO WATCH
Starbucks, Volvo to install EV charging stations at cafes. The partnership is starting small by outfitting 15 Starbucks stores between Denver and Starbucks’s Seattle HQ with Volvo-branded fast chargers. If all goes well, the duo plans to expand the partnership with more chargers at more locations. By setting up EV chargers in their parking lots, retailers want you to use that downtime to shop.
Amazon purchase of MGM gets green light in EU. The proposed $6.5 billion acquisition of movie studio MGM, which was announced last May, would give Amazon access to an extensive film and TV catalog, including James Bond movies, that could better position its Prime Video streaming service to compete with more-dominant rivals such as Netflix. Read more here.
Energy costs are set to reach a record 13% of global GDP this year. Primary energy expenditure as a share of output is set to double from 2021’s level of just 6.5%, according to an analysis by consultancy Thunder Said Energy. Soaring commodity costs are pushing up inflation and adding to bills for households and industry alike. Energy commodity costs have soared on supply concerns and the Ukraine war.
Oil market heads for the ‘biggest supply crisis in decades’. With Russia’s exports set to fall, the IEA says that three million barrels per day of Russian oil output is at risk as sanctions weigh and buyers shun the nation’s exports. The prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock. Read more here.
March’s first IPO, Akanda, pops 163% in debut. Shares of the medical cannabis company soared on its first day of trading. Late Monday, Akanda collected $16 million after selling 4 million shares at $4, the bottom of its $4 to $6 price range. The U.K. company plans to target the international medical cannabis market, which is estimated to be worth about $47 billion by 2027, the prospectus said, citing Emergen Research.