We have an aGreekment! Now that Europe and Greece are friends again, or at least frenemies, all eyes are on Fed Chair Janet Yellen. She talks to Congress this week and could offer more clues on when and how quickly the central bank might raise interest rates. Economic data has been OK, but not great. This week, Redfin releases data on June home prices and sales, and we get a look at inflation, home construction and Pluto. Read on.
To hike or not to hike
On Friday, Yellen signaled a rate hike was likely before the end of the year, and that was before Sunday’s all-nighter in Brussels that brought a path to re-open Greek banks. She’ll speak again Wednesday and Thursday.
Here’s what we know already. The economy is improving, but slowly. Job openings, which Yellen likes to cite, hit a record high in May and the number of hires to openings dropped to a record low. That means there are more help-wanted signs than qualified workers and employers can’t hire fast enough. Still, consumers aren’t shopping much and wages aren’t rising as fast as we’d like. Last week, the International Monetary Fund, which is in the thick of things with Greece, urged the Fed to put off a rate hike until next year.
Change your ZIP code, change your life?
Where should poor people live? Everywhere, says the Department of Housing and Urban Development. Last week it announced a long-awaited plan to reduce racial and economic segregation. In essence, the agency will provide housing vouchers to help low-income families move to neighborhoods with less poverty, better schools and more jobs.
HUD has a mixed record when it comes to public housing, but this latest plan holds promise. The agency will provide data and mapping tools to communities, which will need to identify segregated neighborhoods before they can get federal housing dollars.
There’s plenty of research showing that segregation and entrenched poverty go hand-in-hand. Studies from the Pew Charitable Trust have found that children born into poor neighborhoods are more likely to remain poor as adults. At Harvard, researchers have shown that when low-income families move to communities with less poverty, their children are more likely to attend college and get higher-paying jobs.
“A ZIP code should never determine a child’s future,” HUD Secretary Julian Castro said. The new program goes live in 2018.
Etc.
Oh, about interest rates: Higher mortgage rates have only a “modest effect” on house prices, Fed research shows. Incomes play a much bigger role. This week, Redfin’s Nela Richardson will release data on rates and demand.
Oh, about public housing: President Obama wants to put solar on the rooftops.
Stop throwing shade on first-time buyers. A government paper upends the conventional wisdom that they’re higher risk.
Buy or rent? RealtyTrac answers the question. Hint: It depends on where you live.
Bad-guy roundup: San Diego County prosecutors will deliver more than $826,000 to 121 victims of foreclosure fraud. The Feds accused One Financial Corporation and its subsidiary, One Bank & Trust, of lying to get $173 million in bailout money.
Uh-oh. Fire warning in Seattle.
The world moves at lightning speed, and so does Redfin. Want to tour a house? You can book it now.
The outer exurbs: Tomorrow, we get our first good look at real estate on Pluto.
What are you thinking? Speak up! Lorraine.Woellert@Redfin.com
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