In Today’s Email

• Vacation home demand is declining

• Companies are buying homes for their employees

• The Fed raises rates for the 10th consecutive time

• A Mark Zuckerberg SURPRISE!

• Quick reads

Vacation Home Demand is Declining

• Mortgage-rate locks for second homes hit their lowest point since 2016, falling 52% from pre-pandemic levels, compared to a 13% decline for primary homes.

• The drop in second-home demand is due to several factors including high costs, a slowing short-term rental market, and declining remote work opportunities.

• Second-home mortgage-rate locks for these types of properties fell 49% YoY in March.

• Affluent cash buyers are still looking for vacation condos, particularly in popular vacation destinations.

Companies Are Buying Homes For Their Employees

• Cook Medical is among the companies that are building affordable homes for employees to rent or buy, mainly for middle-income workers.

• This has become a growing trend as companies have found it harder to attract and retain workers due to the high rent and home prices in the US. Cook's newly built Pike Place subdivision is taking shape in what used to be a wheat field, offering affordable homes to employees below the market price.

• Cook, by far the largest employer in the area, has 700 workers at its Spencer plant alone, and many of its employees could hardly afford to live near Spencer. To keep home prices low, Cook cut a deal with builders, while connecting interested employees with local banks that could finance a mortgage.

The Federal Reserve Raises Rates For The 10th Consecutive Time

• The US Federal Reserve has raised interest rates for the tenth consecutive time in an effort to control inflation. The move will take the federal funds rate to a quarter point increase, mirroring rises in February and March.

• In a recent press conference, Federal Reserve Chair Jerome Powell warned that failing to raise the US government debt limit would be highly detrimental to the economy. The consequences of such a failure are highly uncertain and could have short and long-term effects.

• The Mortgage Banker’s Associations Chief Economist, Mike Fratantoni, anticipates mortgage rates will drift down as the economy slows, as the Fed prepares to lower rates in 2024 and as financial market volatility dies down.

• The housing market has exhibited cooling tendencies for the last few months. There has been decrease in home sales, and appreciation rates have slowed down across the country, resulting in home prices dropping in several previously overpriced markets. It is important to note that the factors that drive home prices are complex and not solely determined by interest rates, which can make it difficult to predict how the Fed’s actions will impact the housing market.

Quick Reads Around The Block

• Are bidding wars back again?

• What does the Fed’s May rate hike mean for real estate?

• Home prices rose in 93 of the 100 largest housing markets

P.S. Just like a well-staged home, this real estate newsletter is meant to impress - share it with your friends and show off your market knowledge!