KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
The US housing market is experiencing one of its least affordable periods in decades, with residential real estate sales stalling and a generation of aspiring homeowners being shut out. The only group seemingly unaffected by this crisis are the ultra-wealthy.
Key Points for Investors and Homebuyers:
Overall Market Trends:
- Sales Decline: New home sales in June were down slightly and well below expectations following a 15% decline in May. Transactions for previously owned properties dropped for the fourth consecutive month.
- Luxury Market Resilience: Homes worth over $1 million were the only category to see sales rise in June, according to the National Association of Realtors.
Mortgage Rates and Cash Purchases:
- Rising Rates: The 30-year fixed mortgage rate is around 6.8%, significantly higher than the approximately 3% rate seen from late 2019 to early 2022.
- Cash Buyers: Wealthy buyers are largely unaffected by high mortgage rates as they tend to purchase homes with cash. As of Q1 2024, 45% of high-end homebuyers used all cash, the largest share in at least a decade.
Luxury Homebuilder Performance:
- Toll Brothers Inc: Posted stronger-than-expected orders in Q2 and increased its full-year delivery guidance. Shares have risen roughly 160% since the start of 2023.
- Market Leaders: Toll Brothers is now the second-best performing publicly traded US builder in the past six months.
Economic Disparities:
- Bifurcation: The housing market's division reflects broader economic disparities. Wealthy individuals benefit from rising asset values and robust stock portfolios, while entry-level buyers struggle with stagnant incomes and rising living costs.
- Credit Challenges: Lower-income buyers face additional hurdles such as rising credit card and auto loan delinquencies, making it harder to secure mortgage approvals.
Regional Insights:
- Seattle Area: At The Regency at Ten Trails in Black Diamond, Washington, homes start at $600,000, with popular models exceeding $1 million. More than half of these purchases are made with cash.
- Florida Market: Luxury homes, like a $7.75 million newly constructed property in Sarasota, are selling rapidly, sometimes within days of listing.
Challenges in Affordable Housing:
- Construction Costs: The rising cost of land, labor, and materials makes it difficult for builders to produce homes priced below $400,000.
- Location Risks: To find cheaper land, builders often have to develop in less desirable, farther-out areas, which pose higher risks.
Conclusion:
The US real estate market is increasingly catering to the ultra-wealthy, who are less affected by high mortgage rates and can purchase homes with cash. Meanwhile, the majority of prospective homebuyers face significant barriers due to rising costs and economic disparities. This dynamic is reshaping the housing landscape, with luxury properties thriving even as broader market conditions remain challenging. Investors and policymakers must address these growing inequities to ensure a more balanced and accessible housing market for all.
Comments
Post a Comment