“Surveillance” knocks on the door

Exploring the U.S.⁣ Housing Affordability Crisis

ResiClub co-founder⁢ and editor-in-chief Lance Lambert recently delved into the ongoing U.S. ⁤housing‍ affordability‌ crisis on ‘Making Money.’

Rising Costs and Record Prices

A recent report highlights that the cost​ of purchasing a new home‌ has reached a new peak due⁤ to the surge ‌in ​mortgage rates. According to findings from Redfin, the combination of ‍high mortgage rates⁤ and ⁤soaring home prices has driven the⁣ median monthly housing payment to ⁣a record $2,775, marking an 11% increase from the ⁣previous year.

Ben ⁢Ayers, a senior economist at Nationwide, emphasized the⁣ challenging market conditions for potential homebuyers, citing limited housing inventory‌ and escalating ownership costs as key barriers. Despite robust demand driven by ⁤demographic factors and a strong labor market, many ​first-time buyers are⁤ finding themselves priced out of ​the market.

Root Causes of​ the Crisis

The affordability crisis stems from a variety of factors, including years of underbuilding that have led to a nationwide housing shortage. This scarcity was further compounded by the rapid uptick in mortgage rates ​and⁤ the escalating prices of construction materials.

Over the past few years, higher mortgage rates have‍ created a “golden handcuff” effect in the housing market. ‍Home sellers who secured historically low mortgage ⁣rates of​ 3% or less⁤ during the pandemic‌ have been reluctant to sell, exacerbating the ‍supply shortage and limiting options for prospective‍ buyers.

Future Projections and Market Trends

Economists anticipate that mortgage⁢ rates will remain elevated in the​ first half of 2024, ⁣with ⁢a potential decline only expected once the Federal Reserve initiates rate cuts.⁣ However,​ even with ⁢this adjustment, rates are unlikely‌ to return to the rock-bottom levels witnessed during the pandemic. Additionally, investor confidence in a Fed rate hike has waned due to higher-than-expected inflation‌ reports at⁣ the start of ⁢the year.

The ‌Redfin⁢ report highlighted that some buyers are ⁤rushing⁢ to make purchases amid fears of further rate⁣ hikes, while others have adjusted their home-price ⁤budgets‍ to accommodate the‍ current rate environment.

Current Mortgage Rate Landscape

Recent​ data from Freddie Mac revealed ⁢that the average rate on⁢ a‌ 30-year loan‌ surpassed the 7% mark for the first time this year, climbing from 6.88% to 7.1%. Although‌ this rate is lower than the peak of 7.79% seen ‌in the fall, it remains significantly higher than the ‌sub-3% rates seen⁣ during ⁢the pandemic.

Furthermore, available housing inventory is down by a staggering 34.3% compared to pre-pandemic levels, as reported by Realtor.com. A Zillow survey indicated that homeowners are more inclined to sell if their mortgage rates exceed⁢ 5%, with the majority ⁤currently holding rates below ⁢this threshold.

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Money Today Reporter Seo Jin-wook | 2024.04.19 13:00

Analysis of KOSPI net purchases and net sales from April 1st to 18th

On the afternoon of the 5th, the flag hanging in the Seocho Samsung Electronics headquarters in Seocho-gu, Seoul is waving in the wind. /Photo = News. /Photo=Kim Geun-soo
It was revealed that foreigners made net purchases of nearly 3 trillion won in Samsung Electronics amid the KOSPI decline that occurred in April. It is analyzed that even in the midst of the collapse of ‘80,000 Electronics’, there is strong trust in Samsung Electronics. On the other hand, organizations and individuals sold Samsung Electronics in large quantities and deemed it the right time to sell. Samsung Electronics was once again surprised by the rise in the stock price of Taiwan’s TSMC, the world’s largest foundry company.

According to the Korea Exchange on the 19th, foreigners made a net purchase of 3.1191 trillion won in KOSPI from the 1st to the 18th. While individuals bought a net KRW 2.1018 trillion, institutions led the market down by selling a net KRW 5.2526 trillion.

The concentration of foreigners at Samsung Electronics was evident. During the same period, foreigners made a net purchase of 2.9712 trillion won in Samsung Electronics. It accounted for 95% of the total net purchase. Samsung Electronics Co. (KRW 234.7 billion) ranked 4th in net purchases. Foreigners also bought 347 billion won from Hyundai Motors, 237.9 billion won from Geumyang, 161.4 billion won from HD Hyundai Electric, 149.1 billion won from Hyundai Rotem, 103.7 billion won from Samsung Heavy Industries.

On the other hand, LG Chem (KRW 288.3 billion), Hanmi Semiconductor (KRW 271.2 billion), SK Hynix (KRW 190.5 billion), and LG Energy Solution (KRW 123.9 billion) were net sellers.

Net purchases by an investment entity from April 1st to 18th. /Graphics=Reporter Lee Ji-hye.
Investment judgments on Samsung Electronics by institutions and individuals were mixed. Samsung Electronics was the stock most sold by institutions and individuals. Institutions recorded net sales of KRW 1.8911 trillion and individuals recorded net sales of KRW 1.0362 trillion.

This month, as foreigners, stocks bought by individuals who recorded net purchases in the trillions include LG Chem (KRW 346.1 billion), SK Hynix (KRW 272.7 billion), Samsung SDI (KRW 219.6 billion), and Hanmi Semiconductor (KRW 213.5 billion). There was no concentration on certain stocks as foreigners did.

The stocks bought net by institutions that led the decline included Kia (KRW 114.3 billion), Amore Pacific (KRW 100 billion), Hanwha Ocean (KRW 62.7 billion), and Samsung Electro-Mechanics (KRW 55.8 billion).

Net sales of stocks by investment entity from April 1st to 18th. /Graphics=Reporter Lee Ji-hye.
The stock price of Samsung Electronics moved along with the downward trend of the KOSPI. It hit 86,000 won during trading on the 8th, raising expectations that it would surpass 90,000 won. After that, it went downhill and broke 80,000 electrons on the 17th. As of 12:23 pm on this day, it is trading at 76,900 won, down 3.4% from the previous day. This is interpreted as a sharp decline in stock prices due to TSMC Taiwan’s lower earnings forecast for this year. An estimated net sales volume of 1.442 trillion won by institutions and 202 billion won by foreigners poured in as of 11:10 am

The stock market’s excellent outlook continues. The target stock price continues to rise beyond 100,000 electrons to reach 110,000 electrons. This is because the provisional performance for the first quarter of this year confirmed an improvement in profitability that exceeded market expectations.

Samsung Electronics’ preliminary first quarter performance announced on the 5th was KRW 71 trillion in sales and KRW 6.6 trillion in operating profit. Before the performance announcement, the market consensus was set at KRW 72.4415 trillion in sales and KRW 5.0639 trillion in operating profit. It is analyzed that the significant improvement in profitability in the semiconductor (SD) sector has led to an operating profit that was much higher than expected.

Kim Un-ho, a researcher at IBK Investment & Securities, said, “Operating profit in the first quarter increased significantly compared to the previous forecast. The DS division increased significantly compared to expectations. It was DRAM average selling price (ASP) exceeded expectations, and reversed the provision for NAND inventory valuation losses, he said. He predicted, “Profitability semiconductors improving due to price rebound, so quarterly profitability will continue to improve.”

[저작권자 @머니투데이, 무단전재 및 재배포 금지]

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