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- Dedollarization: India Uses Rupees to Buy Oil From the UAE Markets Insider
- Another Blow to the Petrodollar: India and the UAE Complete First Oil Sale in Rupees SchiffGold
- Rupees for UAE oil, but Russia prefers payment in hard currencies to fund its ongoing war in Ukraine The Financial Express
- Is the dollar being dethroned? India just bought 1M barrels of oil from the UAE using rupees instead of USD for the first time — why this could spell doom for the greenback Yahoo Finance
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Tag Archives: Transactions
Costco CFO says that only a ‘really small percent’ of members misuse their cards, ‘but when you’re dealing with millions of transactions’ it adds up – Yahoo! Voices
- Costco CFO says that only a ‘really small percent’ of members misuse their cards, ‘but when you’re dealing with millions of transactions’ it adds up Yahoo! Voices
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Justice Department Investigation Leads to Takedown of Darknet Cryptocurrency Mixer that Processed Over $3 Billion of Unlawful Transactions – Department of Justice
- Justice Department Investigation Leads to Takedown of Darknet Cryptocurrency Mixer that Processed Over $3 Billion of Unlawful Transactions Department of Justice
- Philly feds help dismantle popular crypto money-laundering site responsible for cleaning $3 billion in illicit funds The Philadelphia Inquirer
- ChipMixer Is Shut Down for Allegedly Laundering $3 Billion in Crypto The Wall Street Journal
- Federal Police Take Down ‘Dark Web Cryptocurrency Laundromat’, Seize $42M in Bitcoin Decrypt
- ChipMixer Crypto Service Shut by US, Germany Over $3 Billion in Transactions Bloomberg
- View Full Coverage on Google News
20 dividend stocks with high yields that have become more attractive right now
Income-seeking investors are looking at an opportunity to scoop up shares of real estate investment trusts. Stocks in that asset class have become more attractive as prices have fallen and cash flow is improving.
Below is a broad screen of REITs that have high dividend yields and are also expected to generate enough excess cash in 2023 to enable increases in dividend payouts.
REIT prices may turn a corner in 2023
REITs distribute most of their income to shareholders to maintain their tax-advantaged status. But the group is cyclical, with pressure on share prices when interest rates rise, as they have this year at an unprecedented scale. A slowing growth rate for the group may have also placed a drag on the stocks.
And now, with talk that the Federal Reserve may begin to temper its cycle of interest-rate increases, we may be nearing the time when REIT prices rise in anticipation of an eventual decline in interest rates. The market always looks ahead, which means long-term investors who have been waiting on the sidelines to buy higher-yielding income-oriented investments may have to make a move soon.
During an interview on Nov 28, James Bullard, president of the Federal Reserve Bank of St. Louis and a member of the Federal Open Market Committee, discussed the central bank’s cycle of interest-rate increases meant to reduce inflation.
When asked about the potential timing of the Fed’s “terminal rate” (the peak federal funds rate for this cycle), Bullard said: “Generally speaking, I have advocated that sooner is better, that you do want to get to the right level of the policy rate for the current data and the current situation.”
In August we published this guide to investing in REITs for income. Since the data for that article was pulled on Aug. 24, the S&P 500
SPX,
-0.50%
has declined 4% (despite a 10% rally from its 2022 closing low on Oct. 12), but the benchmark index’s real estate sector has declined 13%.
REITs can be placed broadly into two categories. Mortgage REITs lend money to commercial or residential borrowers and/or invest in mortgage-backed securities, while equity REITs own property and lease it out.
The pressure on share prices can be greater for mortgage REITs, because the mortgage-lending business slows as interest rates rise. In this article we are focusing on equity REITs.
Industry numbers
The National Association of Real Estate Investment Trusts (Nareit) reported that third-quarter funds from operations (FFO) for U.S.-listed equity REITs were up 14% from a year earlier. To put that number in context, the year-over-year growth rate of quarterly FFO has been slowing — it was 35% a year ago. And the third-quarter FFO increase compares to a 23% increase in earnings per share for the S&P 500 from a year earlier, according to FactSet.
The NAREIT report breaks out numbers for 12 categories of equity REITs, and there is great variance in the growth numbers, as you can see here.
FFO is a non-GAAP measure that is commonly used to gauge REITs’ capacity for paying dividends. It adds amortization and depreciation (noncash items) back to earnings, while excluding gains on the sale of property. Adjusted funds from operations (AFFO) goes further, netting out expected capital expenditures to maintain the quality of property investments.
The slowing FFO growth numbers point to the importance of looking at REITs individually, to see if expected cash flow is sufficient to cover dividend payments.
Screen of high-yielding equity REITs
For 2022 through Nov. 28, the S&P 500 has declined 17%, while the real estate sector has fallen 27%, excluding dividends.
Over the very long term, through interest-rate cycles and the liquidity-driven bull market that ended this year, equity REITs have fared well, with an average annual return of 9.3% for 20 years, compared to an average return of 9.6% for the S&P 500, both with dividends reinvested, according to FactSet.
This performance might surprise some investors, when considering the REITs’ income focus and the S&P 500’s heavy weighting for rapidly growing technology companies.
For a broad screen of equity REITs, we began with the Russell 3000 Index
RUA,
-0.18%,
which represents 98% of U.S. companies by market capitalization.
We then narrowed the list to 119 equity REITs that are followed by at least five analysts covered by FactSet for which AFFO estimates are available.
If we divide the expected 2023 AFFO by the current share price, we have an estimated AFFO yield, which can be compared with the current dividend yield to see if there is expected “headroom” for dividend increases.
For example, if we look at Vornado Realty Trust
VNO,
+1.01%,
the current dividend yield is 8.56%. Based on the consensus 2023 AFFO estimate among analysts polled by FactSet, the expected AFFO yield is only 7.25%. This doesn’t mean that Vornado will cut its dividend and it doesn’t even mean the company won’t raise its payout next year. But it might make it less likely to do so.
Among the 119 equity REITs, 104 have expected 2023 AFFO headroom of at least 1.00%.
Here are the 20 equity REITs from our screen with the highest current dividend yields that have at least 1% expected AFFO headroom:
| Company | Ticker | Dividend yield | Estimated 2023 AFFO yield | Estimated “headroom” | Market cap. ($mil) | Main concentration |
| Brandywine Realty Trust |
BDN, +1.82% |
11.52% | 12.82% | 1.30% | $1,132 | Offices |
| Sabra Health Care REIT Inc. |
SBRA, +2.02% |
9.70% | 12.04% | 2.34% | $2,857 | Health care |
| Medical Properties Trust Inc. |
MPW, +1.90% |
9.18% | 11.46% | 2.29% | $7,559 | Health care |
| SL Green Realty Corp. |
SLG, +2.18% |
9.16% | 10.43% | 1.28% | $2,619 | Offices |
| Hudson Pacific Properties Inc. |
HPP, +1.55% |
9.12% | 12.69% | 3.57% | $1,546 | Offices |
| Omega Healthcare Investors Inc. |
OHI, +1.30% |
9.05% | 10.13% | 1.08% | $6,936 | Health care |
| Global Medical REIT Inc. |
GMRE, +2.03% |
8.75% | 10.59% | 1.84% | $629 | Health care |
| Uniti Group Inc. |
UNIT, +0.28% |
8.30% | 25.00% | 16.70% | $1,715 | Communications infrastructure |
| EPR Properties |
EPR, +0.62% |
8.19% | 12.24% | 4.05% | $3,023 | Leisure properties |
| CTO Realty Growth Inc. |
CTO, +1.58% |
7.51% | 9.34% | 1.83% | $381 | Retail |
| Highwoods Properties Inc. |
HIW, +0.76% |
6.95% | 8.82% | 1.86% | $3,025 | Offices |
| National Health Investors Inc. |
NHI, +1.90% |
6.75% | 8.32% | 1.57% | $2,313 | Senior housing |
| Douglas Emmett Inc. |
DEI, +0.33% |
6.74% | 10.30% | 3.55% | $2,920 | Offices |
| Outfront Media Inc. |
OUT, +0.70% |
6.68% | 11.74% | 5.06% | $2,950 | Billboards |
| Spirit Realty Capital Inc. |
SRC, +0.72% |
6.62% | 9.07% | 2.45% | $5,595 | Retail |
| Broadstone Net Lease Inc. |
BNL, -0.93% |
6.61% | 8.70% | 2.08% | $2,879 | Industial |
| Armada Hoffler Properties Inc. |
AHH, -0.08% |
6.38% | 7.78% | 1.41% | $807 | Offices |
| Innovative Industrial Properties Inc. |
IIPR, +1.09% |
6.24% | 7.53% | 1.29% | $3,226 | Health care |
| Simon Property Group Inc. |
SPG, +0.95% |
6.22% | 9.55% | 3.33% | $37,847 | Retail |
| LTC Properties Inc. |
LTC, +1.09% |
5.99% | 7.60% | 1.60% | $1,541 | Senior housing |
| Source: FactSet | ||||||
Click on the tickers for more about each company. You should read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
The list includes each REIT’s main property investment type. However, many REITs are highly diversified. The simplified categories on the table may not cover all of their investment properties.
Knowing what a REIT invests in is part of the research you should do on your own before buying any individual stock. For arbitrary examples, some investors may wish to steer clear of exposure to certain areas of retail or hotels, or they may favor health-care properties.
Largest REITs
Several of the REITs that passed the screen have relatively small market capitalizations. You might be curious to see how the most widely held REITs fared in the screen. So here’s another list of the 20 largest U.S. REITs among the 119 that passed the first cut, sorted by market cap as of Nov. 28:
| Company | Ticker | Dividend yield | Estimated 2023 AFFO yield | Estimated “headroom” | Market cap. ($mil) | Main concentration |
| Prologis Inc. |
PLD, +1.29% |
2.84% | 4.36% | 1.52% | $102,886 | Warehouses and logistics |
| American Tower Corp. |
AMT, +0.68% |
2.66% | 4.82% | 2.16% | $99,593 | Communications infrastructure |
| Equinix Inc. |
EQIX, +0.62% |
1.87% | 4.79% | 2.91% | $61,317 | Data centers |
| Crown Castle Inc. |
CCI, +1.03% |
4.55% | 5.42% | 0.86% | $59,553 | Wireless Infrastructure |
| Public Storage |
PSA, +0.11% |
2.77% | 5.35% | 2.57% | $50,680 | Self-storage |
| Realty Income Corp. |
O, +0.26% |
4.82% | 6.46% | 1.64% | $38,720 | Retail |
| Simon Property Group Inc. |
SPG, +0.95% |
6.22% | 9.55% | 3.33% | $37,847 | Retail |
| VICI Properties Inc. |
VICI, +0.41% |
4.69% | 6.21% | 1.52% | $32,013 | Leisure properties |
| SBA Communications Corp. Class A |
SBAC, +0.59% |
0.97% | 4.33% | 3.36% | $31,662 | Communications infrastructure |
| Welltower Inc. |
WELL, +2.37% |
3.66% | 4.76% | 1.10% | $31,489 | Health care |
| Digital Realty Trust Inc. |
DLR, +0.69% |
4.54% | 6.18% | 1.64% | $30,903 | Data centers |
| Alexandria Real Estate Equities Inc. |
ARE, +1.38% |
3.17% | 4.87% | 1.70% | $24,451 | Offices |
| AvalonBay Communities Inc. |
AVB, +0.89% |
3.78% | 5.69% | 1.90% | $23,513 | Multifamily residential |
| Equity Residential |
EQR, +1.10% |
4.02% | 5.36% | 1.34% | $23,503 | Multifamily residential |
| Extra Space Storage Inc. |
EXR, +0.29% |
3.93% | 5.83% | 1.90% | $20,430 | Self-storage |
| Invitation Homes Inc. |
INVH, +1.58% |
2.84% | 5.12% | 2.28% | $18,948 | Single-family residental |
| Mid-America Apartment Communities Inc. |
MAA, +1.46% |
3.16% | 5.18% | 2.02% | $18,260 | Multifamily residential |
| Ventas Inc. |
VTR, +1.63% |
4.07% | 5.95% | 1.88% | $17,660 | Senior housing |
| Sun Communities Inc. |
SUI, +2.09% |
2.51% | 4.81% | 2.30% | $17,346 | Multifamily residential |
| Source: FactSet | ||||||
Simon Property Group Inc.
SPG,
+0.95%
is the only REIT to make both lists.
Daniel Snyder considers ‘potential transactions’ for Washington Commanders
The announcement arrives after a tumultuous two-plus years for the franchise, which began with the retirement of its longtime controversial nickname, included multiple investigations into allegations of workplace harassment and financial improprieties against Daniel Snyder and other former team executives and extended into the most recent home game, during which fans booed a video of Tanya Snyder and chanted, “Sell the team!”
Daniel Snyder has denied any allegations directly against him, and the team repeatedly has pledged its commitment to “a cultural transformation.” But the possibility of any change in ownership status had not been suggested publicly before Wednesday.
“Dan and Tanya Snyder and the Washington Commanders announced today that they have hired BofA Securities to consider potential transactions,” the Commanders said in their statement. “The Snyders remain committed to the team, all of its employees and its countless fans to putting the best product on the field and continuing the work to set the gold standard for workplaces in the NFL.”
While a sale of the team is only one of the possibilities, it may be the most viable option.
As the recent sale of the Denver Broncos demonstrated, interest among wealthy individuals and corporations in owning an NFL franchise remains extremely high, given the rapidly escalating values of franchises, but the pool of buyers for a minority stake is small, for the same reason. A 40 percent stake in the Commanders could cost as much as $1.8 billion, based on a 20 percent discount because it would include no decision-making authority. Snyder’s history of conflict and litigation with his business partners and top executives likely would be another consideration for potential investors.
Moreover, any potential transaction would require approval of three-quarters of the other team owners, league spokesman Brian McCarthy said in a statement Wednesday. And such a vote would take place at a time when Snyder faces intense scrutiny from his peers, amid probes by the NFL, the House Committee on Oversight and Reform and the attorneys general of D.C. and Virginia.
In 1999, Daniel Snyder led a group of investors that purchased the team and its stadium for $800 million from the Jack Kent Cooke estate. Forbes estimated in August that the Commanders are worth $5.6 billion. In March 2021, Snyder bought out his three limited partners — Dwight Schar, Fred Smith and Robert Rothman, who collectively owned about 40 percent of the franchise — for $875 million. That transaction required his 31 fellow owners to grant him a waiver to take on an additional $450 million in debt, a debt he must repay by 2028 if he remains owner.
The NFL declined to comment further Wednesday on the prospective transaction. In March, NFL owners approved a resolution endorsing diversity in franchise ownership.
Indianapolis Colts owner Jim Irsay has said in recent weeks that he and fellow NFL team owners should give serious consideration to voting to remove Snyder from ownership of the Commanders.
“I assume we’re going to get into more and more discussion on that,” Irsay said last month, speaking to reporters at an owners’ meeting in New York. “It’s a difficult situation. I believe that there’s merit to remove him as owner of the [Commanders]. I think it’s something that we have to review. We have to look at all the evidence, and we have to be thorough in going forward. But I think it’s something that has to be given serious consideration to.”
Irsay expanded on his comments in a phone interview Friday: “I’m not sure how that report’s going to come out. But what already has come out is extremely disturbing, and I disagree with the process. And I most likely disagree that we haven’t discussed something more severe such as him being removed as owner. As I said, it’s not something that I’m saying we should do. I’m saying it’s something that has to be given serious consideration.”
It would require a vote of at least three-quarters of the owners to remove Snyder from ownership. Multiple owners told The Post in September they believe serious consideration may be given to attempting to oust Snyder from the league’s ownership ranks, either by convincing him to sell his franchise or by voting to remove him.
“He needs to sell,” one of those owners said then. “Some of us need to go to him and tell him that he needs to sell.”
It was not immediately clear Wednesday whether any owners had urged Snyder to sell.
“I think there will be a movement,” the same owner said in September. “We need to get 24 votes.”
That owner said then that the NFL and owners “need to have it happen like the NBA just had,” in reference to Robert Sarver, the owner of the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury. The NBA suspended Sarver for one year and fined him $10 million after an investigation found that he had used racial epithets and treated female employees by a different standard than their male counterparts, among other violations of that league’s policies. Sarver announced in September that he had begun the process of seeking buyers for the two franchises.
The NFL’s current investigation is being conducted by attorney Mary Jo White.
“Mary Jo White is continuing her review,” McCarthy said Wednesday. “We have no update on a timeline.”
The league launched White’s investigation after Tiffani Johnston, a former cheerleader and marketing manager for the team, said at a congressional roundtable in February that Snyder harassed her at a team dinner, putting his hand on her thigh and pressing her toward his limo. Snyder denied the accusations, calling them “outright lies.”
In June, The Post reported details of an employee’s claim that Snyder sexually assaulted her during a flight on his private plane in April 2009. Later that year, the team agreed to pay the employee, whom it fired, $1.6 million in a confidential settlement. In a 2020 court filing, Snyder called the woman’s claims “meritless.”
In April, the House committee detailed allegations of financial improprieties by Snyder and the team in a letter to the Federal Trade Commission. Karl A. Racine, the District’s Democratic attorney general, and Virginia’s Republican attorney general, Jason S. Miyares, announced they would investigate. The team has denied committing any financial improprieties.
Racine’s office has nearly completed its investigation and is planning to take further action in the case, a person familiar with that investigation said last month.
“Today’s news that Dan and Tanya Snyder are exploring selling the Washington Commanders is a good development for the team, its former and current employees, and its many fans,” attorneys Lisa Banks and Debra Katz, who represent more than 40 former team employees, said in a statement Wednesday. “We will have to see how this unfolds, but this could obviously be a big step towards healing and closure for the many brave women and men who came forward.”
The NFL has not said when White’s investigation will be completed. The league has said that White’s report, unlike the findings of a previous investigation of the team’s workplace conducted by attorney Beth Wilkinson, will be released publicly.
The House committee is expected to release its findings in the coming weeks. Daniel Snyder participated remotely in a sworn deposition with the committee for more than 10 hours in July. Former team president Bruce Allen gave a deposition remotely for about 10 hours under subpoena in September.
The Post reported in November 2020 that Snyder’s limited partners had received a $900 million offer from Behdad Eghbali and José Feliciano, the billionaire co-founders of Clearlake Capital, and Feliciano’s wife, Kwanza Jones. The sale was blocked, people familiar with the situation said at the time, because Snyder was attempting to exercise his right of first refusal by matching the offers made to Smith and Rothman but not the offer made to Schar. That resulted in a dispute over whether Snyder was entitled to exercise such rights in a selective manner.
Eghbali and Feliciano reportedly were among the bidders for the Broncos, who were sold by the Pat Bowlen Trust in June to a group led by Walmart heir Rob Walton for $4.65 billion. That’s the most ever paid for an NFL franchise. The owners ratified Walton’s purchase in August.
Wednesday’s announcement also comes with negotiations for public financing for a potential new Commanders stadium stalled. The state legislator who led efforts to lure the Commanders to Virginia said in June those attempts had been halted. State Senate Majority Leader Richard L. Saslaw (D-Fairfax) said then: “There were just so many things out there that a lot of people are saying, ‘Saslaw, this thing needs to wait.’ ”
Before Wednesday, the Commanders had said that Snyder would not sell the team. Following Irsay’s original public comments, a team spokesperson said, “We are confident that, when he has an opportunity to see the actual evidence in this case, Mr. Irsay will conclude that there is no reason for the Snyders to consider selling the franchise. And they won’t.”
Chiefs To Acquire Giants WR Kadarius Toney
The Giants are already moving on from Kadarius Toney. Despite choosing the shifty wide receiver in the 2021 first round, the Giants are trading him to the Chiefs, NFL reporter Jordan Schultz tweets.
Kansas City is sending a compensatory third-round choice and a sixth-rounder to New York for Toney, who has again battled injuries this season. While Toney has shown promise when available, injuries have largely prevented him from playing as a pro. The Giants will receive the third-round pick the Chiefs obtained for the Bears’ Ryan Poles GM hire, according to SI.com’s Albert Breer (on Twitter). Both the third- and sixth-round picks going to the Giants will be 2023 choices, Tom Pelissero of NFL.com tweets.
Quadriceps and oblique injuries sidelined the Florida alum for seven combined games last season — one that did include a Toney game at Arrowhead Stadium — and an ankle malady forced him out of another game. Toney missed much of last year’s training camp with a hamstring injury and underwent a knee scope this offseason. The Chiefs are taking a gamble here, but the 6-foot wideout has flashed high-end athleticism during his brief cameo as a healthy receiver.
Toney caught 39 passes for 420 yards last year, showing rapid-fire run-after-catch ability. He made a big impact in the Giants’ upset win over the Saints — a six-catch, 89-yard performance — and dizzied the Cowboys for 10 receptions and 189 yards the following week. Illustrating Toney’s boom-or-bust career thus far, that game also included Toney throwing a punch at then-Cowboys safety Damontae Kazee. Toney was also tossed from a Giants practice for throwing a punch last year.
At Florida, Toney zoomed onto the first-round radar with a 70-catch, 984-yard, 10-touchdown senior season alongside Kyle Pitts. Prior to that season, however, the 2021 Giants investment did not surpass 300 yards in a college campaign. The Chiefs do not have much of a sample size to go on here, but they have turned to a Giants first-rounder in the recent past. The Giants cut 2019 Round 1 cornerback Deandre Baker, after an offseason arrest, and the Chiefs ended up adding him. The Chiefs are obviously aiming higher with Toney, as Baker did not make a big impact during his time in Missouri.
Toney, who has not played since Week 2, will have a bit more time to acclimate in Andy Reid‘s offense. The Chiefs are in their bye week. Kansas City traded Tyreek Hill this offseason, leading to an overhaul of its receiving corps. Free agency additions JuJu Smith-Schuster and Marquez Valdes-Scantling lead the Chiefs’ attack, and each is coming off 100-yard games in San Francisco. The Chiefs also roster Mecole Hardman, who is in a contract year, and drafted Skyy Moore in this year’s second round. Moore has struggled early in his rookie campaign, and the Chiefs have been linked to both Odell Beckham Jr. and Brandin Cooks ahead of the deadline. This Toney trade could take K.C. out of the OBJ sweepstakes, as it profiles somewhere between a flier and a blockbuster move due to the compensation involved.
The Giants, who had hoped to draft DeVonta Smith instead of Toney in 2021, entered the offseason with a crowded receiver room. But that group has not played together much. Massive free agency disappointment Kenny Golladay is still out with an MCL sprain. Giants hopes at trading the ex-Lions Pro Bowler have run into expected contractually based obstacles. The team also lost its longest-tenured wideout, Sterling Shepard, for the season.
Moving forward, Big Blue has Darius Slayton and Wan’Dale Robinson in place as its top targets. Slayton rising to such a perch is interesting, given his recent place on the trade block after an offseason that saw his stock drop to the point he accepted a pay cut. But this trade figures to make the contract-year wideout a more important piece while making wide receiver a major Giants need in 2023.
Jaguars To Trade RB James Robinson To Jets
Hours after learning Breece Hall will be lost for the season, the Jets are making a move to replace him. They are trading for Jaguars running back James Robinson, Ian Rapoport of NFL.com reports (on Twitter).
The Jaguars’ rushing leader in 2020 and 2021, Robinson has seen his role reduced due to the rise of 2021 first-rounder Travis Etienne. Robinson will be set to team with 2021 draftee Michael Carter for a 5-2 Jets team. The Jags will acquire a conditional sixth-rounder from the Jets, with ESPN.com’s Adam Schefter adding (via Twitter) the pick could become a fifth.
In Robinson, the Jets are acquiring a player who set an NFL record for the most rookie-year scrimmage yards (1,414) accumulated by a UDFA. Robinson did that in just 14 games two seasons ago, being shut down for Jacksonville’s final two contests. After Etienne went down with a Lisfranc injury during the 2021 preseason, Robinson rushed for 767 yards and eight touchdowns. While the December Achilles tear ended Robinson’s second season on a sour note, he still saw his yards-per-carry figure increase from his rookie year (4.5 to 4.7). He is at 4.2 this season.
As a former UDFA, Robinson can be extended at any point. But he can also be kept in 2023 on an RFA tender. This gives the Jets options. For now, however, he stands to join Carter in the team’s post-Hall backfield.
A 2021 fourth-round pick, Carter is averaging 3.5 yards per carry. Carter began the year with a bigger role, but as Hall progressed in Mike LaFleur‘s offense, the North Carolina product became a clear backup option. It will be interesting to see how the Jets deploy Robinson and Carter, but the former has proven far more as an NFLer to this point.
Jacksonville is now committed to Etienne. The Jags played Robinson on just 12 snaps in Week 7, signaling a changing of the guard. The team took Etienne during Urban Meyer‘s one year running the show, doing so after Meyer surprisingly lamented Kadarius Toney being picked just before Etienne became the team’s choice. Etienne is signed through 2024 but can be controlled through 2025 via the fifth-year option. Trevor Lawrence‘s versatile Clemson teammate, Etienne has progressed in his first NFL games. He has totaled 566 scrimmage yards in seven games, scoring his first touchdown as a pro Sunday.
‘We’re seeing buyers backing out’: This dramatic chart reveals U-turn in the housing market as sellers slash home prices
Here’s a chart that speaks a thousand words about the state of the real-estate market right now.
The chart above, part of a new report by real-estate brokerage Redfin
RDFN,
-7.03%
on the property market, reveals how home sellers are adjusting to the new normal of 7% mortgage rates.
The chart says that 7.9% of homes for sale on the market each week had their prices slashed — and that’s a record high.
That’s compared to just 4% of homes having their prices reduced each week over the same period a year ago.
Redfin’s data goes back to 2015. The company averaged out the share of listings which saw a price cut over four weeks, to smoothen out any outliers.
Taylor Marr, deputy chief economist at Redfin, added that looking over a bigger time period, i.e. a month, the company’s data shows that a quarter of homes right now are dropping prices.
“We have never been this high,” Marr told MarketWatch in an interview.
Unlike buyers, who are much more sensitive to rising mortgage rates, “sellers are just slow to react to the changes in demand… they set prices based on where they think the market is [and] are often reluctant to set their prices too low,” Marr said.
So for sellers, prices are a little stickier, he added, and slower to come down.
But even if it took a while, it’s finally happening.
After all, mortgage rates are at multi-decade highs, with the 30-year trending steadily above 7% as of Friday afternoon, according to Mortgage News Daily. And that’s likely to go up even more, as the 10-year Treasury note
TMUBMUSD10Y,
4.023%,
is trending above 4%.
Meanwhile, Redfin said that the median home on the market was listed at over $367,000, up 7% over last year.
The monthly mortgage for that home at the current interest rate of 6.92%, according to Freddie Mac, is $2,559.
A year ago, when rates were at 3.05%, that monthly payment would’ve been just $1,698.
Two tips for home buyers struggling with high mortgage rates
Sellers are dropping their prices by 4 to 5% on average, Marr said.
“You would almost expect it to be a lot worse,” he added, given how quickly rates rose and eroded buying power.
But buyers and sellers are also using two different tactics to get some relief on mortgage rates, Marr said.
One, sellers are reaching out to buyers and offering concessions to buy mortgage rates down.
In other words, sellers are asking buyers to pay the full asking price, but proposing to use part of that as a concession to get buyers a lower interest rate on their mortgage.
“Which is essentially a price drop,” Marr said, “it’s the same thing … but it doesn’t necessarily show up in the data.” And it’s hard to get a sense of the magnitude of how this is playing out, he added.
How it works is as such, Marr explained: If a buyer is putting down $100,000 for a 20% downpayment on their home at a 6.5% interest rate, they can instead allocate 10% for the downpayment, and spend the rest of the $50,000 buying down the mortgage rate to 5%.
“5% isn’t very bad, and it might seem like a lot of money, but … chances are you’re going to be incentivized to refinance [in the future] and you’ll have to pay the closing cost on that loan to refinance, which could be upwards of 15 grand,” Marr added.
Buyers are also switching to adjustable-rate mortgages, which offer lower interest rates at the start of the term. ARMs are nearly 12% of overall mortgage applications, the Mortgage Bankers Association noted on Wednesday, which is high.
Where prices are falling
As to where prices are falling, a couple of places stood out to Redfin.
They said that home prices fell 3% year-over-year in Oakland, Calif., and 2% in San Francisco. New Orleans also saw a 2% drop.
“Even in Atlanta, or Orlando, we’re seeing buyers backing out,” Marr observed.
So with the backdrop of sellers finally dropping listing prices, if you’re a buyer right now, don’t be spooked by rising rates and stop looking, he advised.
“There have been opportunities when rates really came down and gave buyers the moment to jump back in and get some good deals on homes that did drop their prices,” he said.
Plus, “it doesn’t hurt to make a low ball offer,” Marr added. “Some sellers are desperate, and that can be a good strategy … we’ve heard from some of our own agents that some buyers are getting incredible deals right now.”
But if you need to rent for a year and wait for things to calm down, then do that, Marr said, and bulk up those savings for that dream home.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com
U.S. will turn into a buyers’ housing marke in 2023, most experts say. Here’s where you’ll see the biggest declines.
Frustrated by the housing market? Housing experts say they’re expecting the market to tip back into buyers’ court by 2023, according to a new report.
Mortgage rates are approaching 7%, but home prices are only slowly coming back down and inventory is still tight compared to pre-pandemic levels.
Still, the U.S. housing market will shift in favor of home buyers by the end of 2023, 44% of 107 economists and housing experts polled by real-estate company Zillow for its Home Price Expectations Survey said.
And 12% of these experts believed that shift will happen sooner — that is, this year.
Yet roughly 45% of experts surveyed by Zillow say buyers will have to wait, and expect the market to shift in buyers’ favor in 2024, and beyond.
All survey respondents said to expect home-price deceleration in 2023.
“The U.S. housing market will shift in favor of home buyers by the end of 2023. That’s according to 44% of the 107 economists and housing experts surveyed by real-estate company Zillow.”
And we’ve already seen some signs of price pressures manifesting: The median price of an existing home in the U.S. was $389,500 in August, down from $403,800 the previous month, the National Association of Realtors said.
Most of the housing experts surveyed by Zillow noted that the markets most likely to see home prices decline over the next year include pandemic boomtowns like Boise, Austin, and Raleigh; 77% of the experts surveyed expect declines in those cities. They saw a huge jump in sales amid the earliest days of the coronavirus pandemic.
Redfin, another real-estate brokerage company, also noted that Sun Belt home buyers are cancelling their home-purchase agreements at the highest rate as compared to the rest of the nation.
“Most of the housing experts surveyed by Zillow noted that the markets most likely to see home prices decline over the next year include pandemic boomtowns like Boise, Austin, and Raleigh.”
The markets least likely to see home prices decline over the next year include Midwestern cities like Columbus, Indianapolis, and Minneapolis, Zillow said. Only 36% of respondents expected home prices to decline in these areas over the next 12 months.
Some markets in the south are also expected to see demand hold strong, including Atlanta, Nashville, and Charlotte, the respondents added. Only 44% said declines in home prices were likely.
But for all potential buyers stuck renting as either mortgage rates or home prices makes buying a home unaffordable right now, expect rent growth to continue, Zillow said.
Zillow also expects rent growth to outpace inflation, stocks, and home values, over the next 12 months.
The typical home buyer’s monthly mortgage payment for a home priced at the median asking price has climbed $337 to $2,547 in the past six weeks alone, Redfin noted — a 15% jump.
That’s also up 50% from a year ago, when rates were at 3.01%.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com
U.S. Home Sales and Prices Fell in August as Mortgage Rates Rose
The U.S. housing market slowed for a seventh straight month in August, the longest stretch of declining sales since 2007, as higher mortgage rates continued to undercut buyer demand.
Home sales look poised to decline further in the coming months, economists say, as mortgage rates recently topped 6% for the first time since 2008, when the U.S. was in a recession. Many first-time buyers have been priced out of the market, and existing homeowners are opting to stay put rather than give up their current low rates.
“As long as mortgage rates remain elevated, sales will remain depressed,” said
Daryl Fairweather,
chief economist at real-estate brokerage
Redfin Corp.
The decrease in home sales is rippling through the economy. Consumers are spending less on housing-related items such as furniture and appliances, while construction of new single-family homes has also slowed.
Sales of previously owned homes dropped 0.4% in August from July to a seasonally adjusted annual rate of 4.8 million, the weakest rate since May 2020, the National Association of Realtors said Wednesday. August sales fell 19.9% from a year earlier.
The housing market has softened in recent months as the Federal Reserve aggressively raises interest rates to cool the economy and bring down high inflation. The Fed approved raising its benchmark federal-funds rate by 0.75 percentage point Wednesday.
The Fed’s interest-rate moves have led to higher mortgage-interest rates and increased borrowing costs for home buyers by hundreds of dollars a month, pushing many out of the market. The average rate on a 30-year fixed-rate mortgage was 6.02% in the week ended Sept. 15, up from 2.86% a year earlier, according to housing-finance agency
Freddie Mac.
The pandemic-fueled housing market activity in mid-2020 when many Americans moved to larger houses with more outdoor space while spending greater time at home. Bidding wars were widespread, and homes were often snapped up in a matter of days.
The recent increase in mortgage rates is expected to further weigh on home sales this month and next. Homes typically go under contract a month or two before the contract closes, so the August data largely reflect purchase decisions made earlier in the summer. Mortgage rates rose to 5.81% in June, then pulled back for much of the summer.
The drop in demand is reducing buyer competition, and home-price growth has slowed from last year’s rapid pace. But prices remain above where they stood a year ago, because the number of homes for sale is still below normal levels.
The median existing-home price rose 7.7% in August from a year earlier to $389,500, NAR said. Prices fell month-over-month for the second straight month after reaching a record high of $413,800 in June. While prices typically decrease in the late summer, the monthly declines have been bigger than normal, said
Lawrence Yun,
NAR’s chief economist.
The combination of high prices and rising interest rates has pushed home-buying affordability near its lowest level in decades. General economic uncertainty is also keeping buyers on the sidelines, said Odeta Kushi, deputy chief economist at
First American Financial Corp.
“To make the biggest financial decision of your life, you need to have some confidence in the economy, in your job, in the labor market,” she said.
Consumer sentiment toward the housing market fell in August to the lowest level since 2011, according to
Fannie Mae.
Many buyers rushed to purchase in the first few months of the year, because they expected mortgage rates to rise, reducing the number of buyers left in the market today, said Redfin’s Ms. Fairweather. “We’re experiencing an especially cold fall and winter, because the spring was so hot,” she said.
Philip Natale went under contract to buy a new home in Henderson, Nev., in December. By the time he locked in an interest rate this spring, rates had climbed from around 3% to above 5%, pushing up his monthly payment by several hundred dollars.
Philip Natale, with his mom, Michelle, in hat, says rising interest rates pushed up his monthly payment on a new Henderson, Nev., home. Charlie and Ashley Richards bought their first home in Charleston, S.C., in September. Philip Natale; Sandra Dawson
“It’s horrible,” he said, but he hopes to refinance the loan at a lower rate within the next year or two. “The first 12 to 18 payments are probably going to be a big bummer,” he added.
To save on costs, Mr. Natale is eating out less and has decided to delay buying a car. “I just don’t want to feel the stress of adding a car at the same time as I’m buying a home,” he said.
In the four weeks ended Sept. 11, 7.2% of homes on the market each week had a price drop, up from 3.8% a year earlier, according to Redfin. Homes on average sold for 0.5% below their final list price, compared with 1.1% above list price a year earlier.
Nationally, there were 1.28 million homes for sale or under contract at the end of August, down 1.5% from July and unchanged from August 2021, NAR said.
“Home-price growth is likely to continue to decelerate,” Oxford Economics—which forecasts that existing-home sales will fall further through the end of the year—said in a note to clients. “But the limited supply of homes for sale will likely prevent too steep a decline.”
Charlie and Ashley Richards, who are both 29, started shopping for the first home in Charleston, S.C., in June after they found out their rent was going up by $800 a month.
“We got into the market at the right time. Stuff was starting to slow down a bit,” Mr. Richards said. “There were a handful of houses that we looked at that had been on the market for 30 to 60 to even 90 days.”
They bought a house this month for about 3% below the asking price. “I’m very excited,” Mr. Richards said.
Write to Nicole Friedman at nicole.friedman@wsj.com
The new home market, which accounts for about 10% of home sales, has also shown signs of weakness. A measure of U.S. home-builder confidence fell for the ninth straight month in September to the lowest level since May 2020, the National Association of Home Builders said this week. About one-fourth of builders surveyed said they had reduced prices in the past month, NAHB said.
Residential permits, which can be a bellwether for future home construction, also fell 10%, though housing starts rose 12.2% in August from July, the Commerce Department said this week.
News Corp,
owner of The Wall Street Journal, also operates Realtor.com under license from NAR.
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