Hi, MarketWatchers. Don’t miss these top stories.
The housing market is ‘thawing’ from a ‘months-long freeze,’ Freddie Mac says, as mortgage rates continue their downward trek
The 30-year mortgage rate is averaging at 6.13%, Freddie Mac said in its latest weekly survey on Thursday. Read More
Ex-federal investigator lost job after baseball-card addiction led him to moonlight as Amazon and Uber driver
Sean Nelson’s collecting led him to financial ruin and almost blew up his marriage; now he has been sentenced for using his government car for sideline gigs. Read More
Truck-sized asteroid known as 2023 BU will rank among nearest to Earth on record
An asteroid will soon fly among the closest ever to Earth. But NASA has a team of planetary defense experts, and they’re not alarmed. Read More
Fannie Mae chief economist sees house prices dropping in 2023 and 2024 — these are the warning signs that prices are falling in your city.
Doug Duncan of Fannie Mae predicts how housing market perform in 2023, and reveals why he believes prices will fall this year. Read More
U.S. new home sales rise by 2.3%, despite broader sector weakness
New home sales at 616,000 annual rate in December versus 602,000 in prior month. Read More
‘This has bugged me all my life’: My estranged father gave me $1,000 a month to buy a house in California. My brother cried foul, and told me to stop. Who’s right?
‘Should I have even informed my family of what my father was doing until after the house was paid and became a family asset?’ Read More
Off-season travel can save you money, but there’s more than just weather data to consider
Some places in the shoulder-seasons offer ideal conditions for travel, others not so much. Here’s how to find the sweet spot. Read More
Millions of working parents, especially women, are unpaid caregivers. So why doesn’t government data account for their labor?
Working mothers have two full-time jobs. But only one is seen by official statistics. Read More
Banks should be on alert for Russian oligarchs attempting to circumvent U.S. sanctions by investing in commercial real estate, a U.S. Treasury Department watchdog said.
Wealthy Russians with ties to the Kremlin are likely attempting to evade the economic sanctions placed on them in the U.S. by moving money into the commercial-real-estate sector, where complex financing methods and opaque ownership structures can help bad actors hide funds, the Treasury’s Financial Crimes Enforcement Network, better known as FinCEN, said Wednesday.
FinCEN, which serves dual roles as the U.S.’s financial intelligence unit and anti-money-laundering regulator, is the recipient of the suspicious activity reports that financial institutions are required to file if they suspect a transaction may be illicit in nature. Law-enforcement officials can consult the reports when conducting investigations into financial crimes.
The Biden administration has targeted wealthy Russians as part of its response to President
invasion of Ukraine last year, placing those with close ties to the Russian government on blacklists that are intended to prevent them from accessing the U.S. financial system.
The alert issued by FinCEN on Wednesday is the Treasury’s latest effort to prevent sanctioned Russians from finding ways to evade such financial restrictions. In an 11-page report, FinCEN listed a number of potential red flags and typologies it said banks should be on the lookout for.
“Thanks to international pressure and the economic restrictions that more than 30 countries have imposed on Russia for its brutal war against Ukraine, sanctioned Russian elites are increasingly left with fewer options for moving and hiding their ill-gotten wealth,” FinCEN Acting Director
Himamauli Das
said.
Sanctioned individuals may try to use pooled investment vehicles or offshore funds to avoid due-diligence processes, FinCEN said in its alert. Banks aren’t typically required to verify the identities of individuals who own less than 25% of a fund. Sanctioned individuals could keep lowering their stakes to avoid detection, while still maintaining control of the fund, FinCEN said.
Oligarchs also may use shell companies and multiple layers of legal entities or trusts, or transfer their assets to a family member or business associate to conceal their ownership, the Treasury bureau added.
Sanctioned individuals aren’t just investing in high-end or luxury properties, according to the alert. In some cases, they may seek out more inconspicuous investments that provide stable returns without drawing unwanted attention. Such sanction evasion strategies are just as likely to occur in small to midsize U.S. cities as they are in the largest metropolitan areas, FinCEN said.
FinCEN’s latest alert builds on a similar warning issued last year, in which the watchdog advised banks to pay close attention to transactions involving high-value assets such as artwork, luxury yachts and jewelry.
Federal prosecutors have warned that lawyers, consultants and other service providers who work for sanctioned individuals could run afoul of the law.
An indictment unsealed earlier this week charged a former high-level FBI agent and a former Russian diplomat with sanctions violations in connection with work they did for
Oleg Deripaska,
a raw-materials magnate who was placed on a sanctions blacklist in 2018.
Write to Dylan Tokar at dylan.tokar@wsj.com
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By Robb M. Stewart
Canada is paving the way to become a launching pad for commercial space flights, with plans by Ottawa to establish regulations aimed at supporting launches by private entities.
The move promises to better position Canada to tap into increase in money that has poured into the space sector in recent years, as a number of countries have increased their level of space activity to join or take on industry titans like the U.S.
The federal government said Friday that while Canada is well positioned to support space launches, the regulatory framework needs to be modernized and a number of measures are planned to support commercial launch activities.
In the interim, the government said it plans to allow commercial space launches in Canada under existing legislation and regulations, on a case-by-case basis. During this period, which is expected to last three years, Transport Canada intends to work with other federal departments and agencies to develop regulatory requirements, safety standards and licensing conditions needed for commercial space launches in the country.
The government said the transportation department also will establish an interdepartmental review process to ensure any launch is considered and approved in a way consistent with domestic legislation, international treaties, and national security and foreign policy interests.
“A long-term Canadian commercial space launch regulatory framework is key to maintaining Canada’s leading role in outer space exploration and development and represents an important evolution in Canada’s space activities,” said Annie Koutrakis, parliamentary secretary to the minister of transport. “Canadian space launch capability will create lasting economic opportunity for the Canadian space sector, encourage innovation and research, and support national security.”
Since the early 1980s, nine Canadian Space Agency astronauts have flown to space 17 times. The government said that in 2020, the Canadian aerospace industry contributed more than $16 billion and close to 207,000 jobs to the country’s economy.
In a report released Friday, McKinsey & Co. said the space sector has experienced massive growth in investment, with public and private markets globally injecting $10 billion in fresh capital into space companies in 2021, compared with $300 million a decade earlier. And while the U.S. remains in the lead for funding, with a civil space budget that represents more than 40% of the worldwide total, many countries are raising their level of space activity and about 70 have established national space agencies, the consulting firm said.
A first attempt to launch satellites from British soil reached space earlier this month, though fell short of reaching its target orbit. In November, India tested its first privately developed rocket with a suborbital launch that was a step forward in its efforts to develop a commercial space industry.
Maritime Launch Services Inc., which is developing a launch site in the eastern province of Nova Scotia that will provide satellite delivery services to clients, welcomed Canada’s support for commercial launch activities.
“With today’s announcement, the global space industry can be confident that commercial launch in Canada is not only here, but it has this government’s support,” Maritime Launch Chief Executive Stephen Matier said.
Write to Robb M. Stewart at robb.stewart@wsj.com
Last Updated: Jan. 21, 2023 at 2:48 p.m. ET
First Published: Jan. 20, 2023 at 9:24 a.m. ET
Even as mortgage rates come off of recent highs, buyer demand remains constrained. And that’s affecting listing and asking-price decisions among sellers, according to a new report.
The report by Redfin RDFN, which tracked home-sale prices for the four weeks ending Jan. 15, found that the median price of a house sold in the U.S. was up 0.9%…
Even as mortgage rates come off of recent highs, buyer demand remains constrained. And that’s affecting listing and asking-price decisions among sellers, according to a new report.
The report by Redfin
RDFN
,
which tracked home-sale prices for the four weeks ending Jan. 15, found that the median price of a house sold in the U.S. was up 0.9% from a year ago, at $350,250.
While home prices on a national level hold steady, property markets in some parts of the country are showing weakness.
Prices of homes sold fell on a year-over-year basis in 18 of the 50 most populous metro areas in the U.S., with San Francisco leading the way. In San Francisco, selling prices were down 10.1% from a year earlier, Redfin said.
That sale-price decline was followed by that of nearby San Jose, Calif., where prices fell by 6.7%. Austin, Texas, saw home-sale prices drop by 5.5%, and Detroit by 4.3%.
Phoenix, a boomtown earlier in the pandemic, saw home-sale prices fall by 3.7%.
The median asking price of newly listed homes in the 50 top U.S. metropolitan areas was $357,200, up 3.9% year over year, the biggest increase in two months, though the median listing price verged on $400,000 last spring.
A drop in mortgage rates has prompted some buyers to rush into the market. The rate on a typical 30-year fixed-rate mortgage fell to 6.15%, Freddie Mac said on Thursday.
Mortgage demand has surged 28%. The Redfin report identified a 25% rise in mortgage applications over the week ending Jan. 13.
But mortgage payments are still high compared with a year ago. The monthly payment for a median-priced home is $2,262, Redfin said. Monthly mortgage payments are up 30% from a year ago.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com
Dear MarketWatch,
I’m from New Jersey. My daughter and I are looking to invest in a multi-family unit for our family. I’m retired and live in a luxury apartment paying $2,000 a month for rent, soon to increase to $2,200.
My daughter is a homeowner and her property currently has $75,000 to $100,000 in equity.
We would like to know if it would make sense for my daughter to sell her home (she would make at least $75,000 at the rates homes are selling in her area), and we move together into a rental home for $3,300 a month, and plan to wait a year for the housing prices to go down before purchasing a multi-family?
Thank you.
Timing the market
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
Dear Timing,
Given the headwinds in the housing market right now, I’d say, go for it: Sell now, and slowly start looking for a home to buy.
As a buyer, the environment isn’t great. The number of homes for sale is low, as homeowners are locked in to ultra-low mortgage rates. They’re not going to give that up easily, so you have few options. That will also keep prices relatively high in New Jersey.
Plus, mortgage rates are still above 6% still, which means you’re gonna have to budget for higher monthly payments.
Interest rates may fall this year. “I think 2023 will be a year of volatility. The economy is already performing better than many expected, which is giving the Fed less of an incentive to cut rates,” Mohannad Aama, a portfolio manager at Beam Capital, recently told MarketWatch.
But as a seller, this same environment presents a great opportunity.
“We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point,” Melissa Rubenstein, a Realtor for Christie’s Real Estate New Jersey, told MarketWatch.
“‘We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point.’”
But do adjust your expectations. The house may not fetch the price you both have in mind. According to one study by Wharton, some homeowners list their home prices higher than the market rate. As a result, homes stay on the market longer and, as the Wharton report notes, listing a house at above the market rate creates a “psychological dependence on the original purchase price [and] generates an aversion to losses that is 2.5 times larger than the prospect of gains.”
Timing the sale before the spring may work out for you. Spring is generally the start of the home-shopping season.
“I would take advantage of that situation and get the most money possible for your daughter’s home before any rush of inventory in the spring,” Rubenstein added.
So yes, it may make sense to move ASAP on selling the home. But wait before you buy, either for rates or prices to drop, or inventory to rise.
Plus, homeowners are starting to turn to the rental market for cash flow, so you may actually get a discount on rents too, in New Jersey.
But be warned: There are no guarantees when trying to time the market.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Credit researchers at Goldman Sachs now expect home prices in several “overheated” metro areas to fall over 25% from peak levels.
Metro areas included in their forecast were San Jose, Austin, Phoenix and San Diego, according to a new home-price outlook from a Goldman research team led by Lotfi Karoui.
Some of the markets at risk for the biggest price drops this year (see chart) already saw at least a 10% depreciation in home price growth, according to the Goldman team.
Austin, San Francisco, San Diego and Phoenix to see biggest home price declines in 2023.
Zillow, Goldman Sachs Global Investment Research
While sharp price drops could present “localized risk of higher delinquencies for mortgages originated in 2022 or late 2021,” declines aren’t expected to be as big of a threat everywhere.
Nationally, the Goldman team expects home prices to fall by roughly 10% this year from June 2022 levels, following their roughly 4% estimated decline in the second half of last year.
“This decline should be small enough to avoid broad mortgage-credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” the team wrote.
U.S. real-estate activity has fallen off a cliff since the Federal Reserve began jacking up rates in March to tame high inflation. Home prices, however, also rose 40% since March 2020, according to Deutsche Bank.
The new Goldman home-price forecast hinged on an expectation that interest rates will remain elevated for longer. The team said their year-end forecast for the 30-year fixed-rate mortgage was revised higher by 30 basis points to 6.5%, but they expect it to retreat to 6.15% in 2024.
“This path would cause affordability to worsen incrementally, after a slight improvement over the past two months,” the team said, with home prices likely to shift to a 1% appreciation in 2024 if the U.S. economy avoids a recession.
U.S. stocks rose for a second straight session Wednesday, a day before an update on consumer inflation is expected to show a monthly decline in the annual rate to 6.5% from a 9.1% peak this summer. The Dow Jones Industrial Average
DJIA,
gained 0.8% Wednesday, the S&P 500 index
SPX,
rose 1.3% and the Nasdaq Composite Index
COMP,
advanced 1.8%.
Read: Why Thursday’s U.S. CPI report might kill stock market’s hope of inflation melting away
By Joe Hoppe
Braveheart Investment Group PLC shares fell Tuesday after it said that portfolio company Phasefocus Holdings Ltd.’s 2022 sales were lower than forecast.
Shares at 0816 GMT were down 1.75 pence, or 18% at 7.75 pence.
The London-listed investment company–which holds 44.69% of Phasefocus–said that since its interim results in October, Phasefocus has increased its stock holding of critical components to provide customers with shorter lead times. However, due to the loss of Cytena as lead distributor, sales in 2022 missed forecasts.
Phasefocus is now marketing and selling in the E.U. and U.S. directly and has already developed a promising pipeline of sales, Braveheart said. The company said it remains optimistic about Phasefocus’s future prospects and intends to participate in a proposed further funding round of 300,000 pounds ($365,550).
Braveheart also said that wholly-owned portfolio company Paraytec Ltd.’s clinical study to develop rapid tests continues to recruit participants, running alongside the Sheffield Teaching Hospitals National Health Service Foundation Trust existing drive-through coronavirus test service. However, the program has recently experienced further delays due to a shortage of available NHS staff to collect additional swab specimens for analysis, and initial test results are now expected in February.
“The commercial justification for the second phase, a longitudinal study, will then be determined after consideration of the prevailing coronavirus test market,” Braveheart said.
Write to Joe Hoppe at joseph.hoppe@wsj.com
Getty Images/iStockphoto
Question: I am reaching out for help hiring an advisor. My salary is $101,899, with a bonus that can vary each year but last year it was $17,000. I would like an adviser who will proactively help me grow a portfolio, tell me where and when to invest and work with my accountant that helps maintain and reach my goals. I am also looking for someone who helps late savers. Note that I have student loans, I’m securing a mortgage now, I don’t have a car loan, I’d like to live on as little as possible and I’d like to secure rental properties as part of my investment strategy. (Looking for a financial adviser too? This tool can help match you with an adviser who might meet your needs.)
Answer: Kudos for coming to a place where you’re now looking to save and invest for your future — no matter how late in the game you feel you are. A financial adviser could be of help to you, but it may be tougher to find someone to help you at your wealth level, as many advisers have account minimums.
That said, it’s not impossible, and your best bet may be an adviser who works on an hourly or flat-fee project basis. “These types of advisers are often more willing to help you address the full spectrum of financial planning issues,” says certified financial planner Joe Favorito at Landmark Wealth Management.
Looking for a new financial adviser or have an issue with your current one? Email picks@marketwatch.com.
Pros recommend searching on sites like CFP Board, the National Association of Professional Financial Advisors or XY Planning Network. “NAPFA and XY Planning Network are industry organizations that help promote fee-only financial planning and they offer tools to assist consumers with their search for a financial adviser. Typically, you can filter by location and an adviser’s specialties,” says certified financial planner Mark Humphries at Sentinel Financial Planning. (Looking for a financial adviser too? This tool can help match you with an adviser who might meet your needs.)
Look, too, for a fee-only adviser, as they are paid a set rate for their services rather than a commission on the products they sell or trade. And look for someone who has experience where you need it, such as with real estate investments, investing and budgeting. (Here are the 15 questions you should ask any adviser you want to hire.) “The advantage of working with an adviser is that you can develop a plan and monitor and track your progress,” says certified financial planner Anthony Ferreira at WorthPointe Wealth Management. (Looking for a financial adviser? This tool can help match you with an adviser who might meet your needs.)
After you’ve narrowed down several prospective advisers, speak with them to get a sense of their philosophy and to understand if it matches yours. “I believe finding the right financial adviser is more than someone who can crunch numbers and make recommendations. It’s finding someone you feel comfortable with and are not hesitant to be honest with,” says Humphries.
Discuss the pros and cons of all different investment solutions, including investment real estate. “Just like getting advice from your doctor or coach or physical trainer, the advice may not be what you want to hear,” says Ferreira.
You mention working with an accountant, and certainly, many folks have both an accountant and a financial planner who fulfill different needs; ultimately your accountant and financial planner can work together to make sure they’re on the same page regarding your financial situation. Just consider whether you need both: While accountants typically handle auditing work, tax preparation and some financial forecasting, financial planners assist with things money management and retirement planning.
Looking for a new financial adviser or have an issue with your current one? Email picks@marketwatch.com.
Questions edited for brevity and clarity.
The advice, recommendations or rankings expressed in this article are those of MarketWatch Picks, and have not been reviewed or endorsed by our commercial partners.
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