A home with a sign indicating that it is under contract to be sold is seen in a neighborhood of downtown Washington.
Jim Bourg | Reuters
In a grim sign for the housing market’s busiest season, pending home sales, which measure signed contracts on existing homes, fell 4.1% in February compared with January, according to the National Association of Realtors.
Sales were down 5.4% compared with February 2021. Analysts were expecting a slight gain. This is the fourth straight month of declines in pending sales, which are an indicator of future closings, one to two months out.
Since this count is based on signed contracts in February, when mortgage rates really started to take off, it is a strong indicator of how the market is reacting to the new rate environment, especially as it is entering the crucial spring season.
Rates began rising in January and continued sharply higher in February. The average rate on the 30-year fixed mortgage is now more than a full percentage point higher than it was one year ago.
Regionally, pending sales rose 1.9% month to month in the Northeast but were down 9.2% from a year ago. In the Midwest, sales decreased 6.0% for the month and were down 5.2% from February 2021. In the South, sales fell 4.4% monthly and 4.3% annually, and in the West they were down 5.4% for the month and 5.3% from a year ago.
The jump in mortgage rates could not come at a worse time, as spring is historically the busiest season for the housing market.
“Most of my buyers are adjusting their target to buy the home they can afford at the higher rates,” said Paul Legere, a buyer’s agent with Joel Nelson Group in Washington, D.C. “There has been a pronounced sense of urgency to lock in a mortgage rate and get into a property. In my market at least, buyers are not electing to rent as an alternative.”
Today’s potential buyers are facing an expensive market. The median monthly payment on a new mortgage is now taking up a much larger share of a typical consumer’s income. It jumped 8.3% in February compared with January, according to a new index from the Mortgage Bankers Association. It is nearly 22% higher than it was in February 2021. For borrowers on the lower end of the market, that monthly payment is up nearly 10% month to month.
“The 30-year fixed-rate mortgage spiked 73 basis points from December 2021 through February 2022. Together with increased loan application amounts, a mortgage applicant’s median principal and interest payment in February jumped $127 from January and $337 from one year ago,” said Edward Seiler, MBA’s associate vice president of housing economics.
Buyers continue to face a tight and pricey market. Now they have to factor in inflation in other parts of their budgets, as well. List prices for homes reaccelerated after a brief reprieve in the fall of last year, according to Realtor.com.
“As we move into the spring season, markets remain clearly tilted in sellers’ favor,” said George Ratiu, senior economist at Realtor.com. “However, with mortgage rates moving toward 5%, we are seeing early signs of a shift in housing fundamentals, as many people looking for a home have hit a ceiling on their ability to afford a home.”
OPEC+ to consider oil cut of over than 1 million barrels per day
OPEC+ will consider an oil output cut of more than a million barrels per day (bpd) next week, OPEC sources said on Sunday.
Omar Marques | SOPA Images | LightRocket | Getty Images
OPEC+ will consider an oil output cut of more than a million barrels per day (bpd) next week, OPEC sources said on Sunday, in what would be the biggest move yet since the Covid-19 pandemic to address oil market weakness.
The meeting will take place on Oct. 5 against the backdrop of falling oil prices and months of severe market volatility which prompted top OPEC+ producer, Saudi Arabia, to say the group could cut production.
OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.
Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the U.S. dollar after the Federal Reserves raised rates.
A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.
The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.
Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of U.S. President Joe Biden.
Last week, a source familiar with the Russian thinking said Moscow would like to see OPEC+ cutting 1 million bpd or one percent of global supply.
That would be the biggest cut since 2020 when OPEC+ reduced output by a record 10 million bpd as demand crashed due to the Covid pandemic. The group spent the next two years unwinding those record cuts.
On Sunday, the sources said the cut could exceed 1 million bpd. One of the sources suggested cuts could also include a voluntary additional reduction of production by Saudi Arabia.
OPEC+ will meet in person in Vienna for the first time since March 2020.
Analysts and OPEC watchers such as UBS and JPMorgan have suggested in recent days a cut of around 1 million bpd was on the cards and could help arrest the price decline.
“$90 oil is non-negotiable for the OPEC+ leadership, hence they will act to safeguard this price floor,” said Stephen Brennock of oil broker PVM.
Avoid these 5 activities during a thunderstorm, says meteorologist
When it’s raining outside and thunder follows, it’s likely that lightning is pretty close behind and there are some places you shouldn’t be for your own safety — mostly outdoors.
“When thunder roars, go indoors and stay there for 30 minutes after the last clap of thunder,” the National Weather Service advises in its lightning safety rules. The greatest potential harm during a thunderstorm is lightning.
You might think getting struck by lightning is only possible if you’re outside, and that you’re completely safe as long as you’re at home, but that isn’t always the case, according to the Centers for Disease Control and Prevention.
The agency reports that “about one-third of lightning-strike injuries occur indoors.”
And while you may have seen advice against showering during a thunderstorm trending in the news, there are other activities you should avoid doing at home until after a storm passes as well, according to John Homenuk, a meteorologist and founder of New York Metro Weather.
Homenuk, the National Weather Service and the CDC all recommend avoiding doing these activities at home during a lightning storm:
- Taking a shower
- Washing dishes
- Standing near windows, doors, porches and concrete
- Touching electronic equipment connected to an electrical outlet (i.e. computers, laptops, game systems, washers, dryers or stoves)
- Using corded phones
Stay away from water
As a starting point, Homenuk warns against being near or in water during a thunderstorm.
Showering, bathing or washing dishes can all pose a risk if lightning is occurring near your home.
“When lightning happens, it generally travels on the path of least resistance, which is often going to take it into metal which can go through the pipes,” he says. “And obviously that would not be great if you were in the shower.”
The CDC states that the risk of lightning traveling through your plumbing is lower for those with plastic pipes as opposed to metal pipes.
However, the agency still advises you to “avoid any contact with plumbing and running water during a lightning storm to reduce your risk of being struck.”
Washing dishes may pose a lower risk than taking a bath or a shower because your whole body isn’t submerged in water or standing directly under a metal showerhead as the pipes are running, says Homenuk.
“But still, generally if you can, you [should] wait for the storm to pass instead of utilizing the water and the pipes that can be a pathway for that electricity to travel,” he notes.
Consider these criteria when deciding where to wait out a storm indoors, Homenuk says:
- Is the building sturdy?
- Am I away from all the windows?
- Am I standing near interior walls in my home, instead of the outer walls?
But if you get caught in the middle of a thunderstorm outside, make sure that you’re not near water, standing near or under a tree or on tall objects, he adds. These locations make you less safe during a storm.
Additionally, if you’re unable to get home during a bad lightning storm, your car can offer you some safety,
“It’s a good secondary option,” he says. “But if there’s a store or another building that you can get to that’s not your home, then that’s also a good option.”
Homenuk commonly hears that being parked under an underpass during a severe storm poses a potential risk.
“That is not safe. In fact, when there are strong winds, the winds can actually be stronger and more dangerous underneath those underpasses because they can funnel through with greater speed,” he says. “It also creates a tremendous traffic hazard.”
And if you notice flooding, do not try to drive through it because your car can get stuck, Homenuk warns. It may be a lot deeper than what meets the eye.
Above all else, if you can do so safely, Homenuk says, “trying to be indoors during a thunderstorm is the best thing.”
The 10 least popular U.S. states to move to in 2022
A recently released report, moveBuddha, a relocation tech company, ranked the least popular states to move to in 2022.
The 2022 Mid-Year Migration Report used data collected from January 1 to July 5, 2022, via the company’s moving cost calculator.
moveBuddha compared the inflow to the outflow of people state to state to see which places are gaining new residents and which are losing their current population.
In-to-out ratio: 0.50
New Jersey topped the list of least popular states. According to the report, the Garden State is losing the most residents compared to those moving in.
Residents in the East Coast state pay the country’s highest property taxes, which may account for the loss in population.
The two other states that make up the New York metropolitan area — New York and Connecticut — are experiencing similar challenges as New Jersey.
Both made the list of states that people are moving out of more than they’re moving in, at no. 4 and no. 5 on the list respectively.
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