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close video Ara Hovnanian: Housing market normalizing despite supply shortage

Hovnanian Enterprises chairman and CEO Ara Hovnanian discusses the state of home builders and if the housing market hit bottom on ‘The Claman Countdown.’

Goldman Sachs expects home values to worsen through 2023 amid continued skyrocketing interest rates and declining housing prices.

The firm wrote to clients earlier this month that it predicts four U.S. cities will suffer the most catastrophic dips, drawing comparisons to the 2008 housing crash.

San Jose, California; San Diego, California; Austin, Texas; and Phoenix, Arizona, will likely see noticeable increases before drastic decreases of more than 25%.

These declines would be similar to those witnessed during the Great Recession in 2008. Home prices across the U.S. fell around 27% at the time, according to the S&P CoreLogic Case-Shiller index.

GOLDMAN SACHS ANNOUNCES REDUCTION IN ASSET MANAGEMENT INVESTMENTS

Goldman Sachs expects home values to worsen through 2023 amid continued skyrocketing interest rates and declining housing prices. (Reuters Photos)

"Our 2023 revised forecast primarily reflects our view that interest rates will remain at elevated levels longer than currently priced in, with 10-year Treasury yields peaking in 2023 Q3," Goldman Sachs strategists wrote, according to the New York Post. "As a result, we are raising our forecast for the 30-year fixed mortgage rate to 6.5% for year-end 2023 (representing a 30 bp increase from our prior expectation)."

In 2022, mortgage rates jumped from 3% to 6%.

"This [national] decline should be small enough as to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely," Goldman Sachs wrote. "That said, overheated housing markets in the Southwest and Pacific coast, such as San Jose MSA, Austin MSA, Phoenix MSA, and San Diego MSA will likely grapple with peak-to-trough declines of over 25%, presenting localized risk of higher delinquencies for mortgages originated in 2022 or late 2021."

San Jose, California; San Diego, California; Austin, Texas; and Phoenix, Arizona (pictured), will likely see noticeable increases before drastic decreases of more than 25%. (iStock / iStock)

The bank says these cities will suffer the lowest prices this year because they became too detached from fundamentals during the COVID-19 pandemic housing boom.

Goldman Sachs also forecasts that many Northeastern, Southeastern, and Midwestern markets could see milder corrections.

Home prices are expected to dip slightly in New York City (-0.3%) and Chicago (-1.8%), while Baltimore (+0.5%) and Miami (+0.8%) will see higher prices, the firm said.

FEDERAL RESERVE INVESTIGATING GOLDMAN SACHS' CONSUMER BUSINESS

Home prices are expected to dip slightly in New York City and Chicago while Baltimore and Miami (pictured) will see higher prices. (iStock / iStock)

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"Assuming the economy remains on the path to a soft landing, avoiding a recession, and the 30-year fixed mortgage rate falls back to 6.15% by year-end 2024, home price growth will likely shift from depreciation to below-trend appreciation in 2024," Goldman Sachs wrote.

The average 30-year fixed mortgage rate was at 7.37% at its peak in November.

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Trump says he has asked Xi Jinping to free Briton Jimmy Lai

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Trump says he has asked Xi Jinping to free Briton Jimmy Lai

Donald Trump has asked his Chinese counterpart to release pro-democracy campaigner Jimmy Lai, who has been found guilty of national security offences in Hong Kong.

The US president said he felt “so badly” about the media tycoon and British citizen, 78, who was arrested in August 2020 after China imposed a national security law following massive anti-government protests in Hong Kong.

Lai, who had previously been sentenced for several lesser offences during his five years in prison, could now spend the rest of his life behind bars.

Jimmy Lai. Pic: Reuters
Image:
Jimmy Lai. Pic: Reuters

Mr Trump said he had spoken to Xi Jinping about Lai’s case and asked for his release.

“I spoke to President Xi about it, and I asked to consider his release,” he said. “He’s not well, he’s an older man, and he’s not well, so I did put that request out. We’ll see what happens.”

It comes as UK Foreign Secretary Yvette Cooper said China’s ambassador to the UK had been summoned over Lai’s conviction to underline the government’s position in the “strongest terms”.

Speaking in parliament, she repeated calls for Lai to be released and called the conviction “a politically motivated prosecution”.

People wait to enter the court building ahead of the verdict. Pic: AP
Image:
People wait to enter the court building ahead of the verdict. Pic: AP

Ms Cooper made the remarks after Sir Keir Starmer’s spokesperson said Lai’s case has been a priority for the government and “we will continue to call for his immediate release”.

Earlier in the day, China’s ambassador to the UK, Zheng Zeguang, met with a senior official at the UK Foreign Office “to lodge solemn representations over the UK side’s statement that made irresponsible remarks on the Hong Kong High Court’s guilty verdict in the Jimmy Lai case”, China’s embassy said.

Explained: Who is Jimmy Lai?

Lai, who founded the now-defunct pro-democracy newspaper Apple Daily, was charged with two counts of conspiracy to commit collusion with foreign forces to endanger national security, as well as one count of conspiracy to distribute seditious publications. He was found guilty of all three charges.

Speaking after the verdict, Lai’s daughter Claire said if he were released he would devote himself to God and his family rather than political activism.

“He just wants to reunite with his family. He wants to dedicate his life to serving our Lord, and he wants to dedicate the rest of his days to his family,” Claire Lai told the Associated Press. “My father is fundamentally not a man who operates on illegal ground.”

Claire Lai. Pic: Reuters
Image:
Claire Lai. Pic: Reuters

She said five years of solitary confinement has taken a toll on his health, and he has lost a significant amount of weight.

“He is a lot weaker and has only gotten weaker in the last year,” she said. “He has back pains and waist pains, his nails… when we visit, we can tell that they’re turning colours and falling off. Some of his teeth are rotting.”

He also has heart palpitations, is diabetic and his vision and hearing are failing, she added.

Hong Kong’s security chief, Chris Tang, said Lai has received “full medical services” and has never complained of the medical care he has been given.

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Jimmy Lai’s son: UK government must ‘do more’

‘You’ve got to keep fighting’

Meanwhile, her brother Sebastian Lai is lobbying the UK government for their father’s release.

“Regarding the United Kingdom, we talk about normalising relationships. Well, my father’s freedom should be a precondition to that,” he said.

Asked if he is optimistic international pressure can help, he said: “I think you’ve got to keep fighting no matter what. I think, taking my father’s example, standing up for what is right is why we’re doing it. This is my way of fighting for it.”

Hong Kong’s leader John Lee welcomed the verdict, saying: “He has harmed the fundamental interests of the country and the well-being of the people of Hong Kong; his actions are shameful and his intentions malicious.”

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European leaders back ‘multinational force’ to secure peace in Ukraine, as US commits to security guarantees

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European leaders back 'multinational force' to secure peace in Ukraine, as US commits to security guarantees

European leaders have called for a “multinational force” to secure Ukraine after any peace deal with Russia, as they struck an optimistic tone after talks in Berlin.

In a joint statement, they heralded “significant progress” – boosted by a new US commitment to provide unspecified security guarantees to Ukraine.

German Chancellor Friedrich Merz described the guarantees by the US as “truly remarkable” and a “very important advancement”.

Adding to the positive mood music, Donald Trump said he believed “we are closer now than we have been ever” to agreeing a ceasefire for the deadliest conflict in Europe since the Second World War.

The comments round off two days of talks in Berlin between Ukrainian and US envoys Steve Witkoff and Jared Kushner, and a separate meeting of European leaders in the German capital.

Another high-level meeting, this time of the Ukraine Defence Contact Group, will be held on Tuesday. The British defence secretary, John Healey, will attend.

Read more: UK’s ‘sons and daughters’ need to be ready to fight

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Siobhan Robbins: Change in mood music after US-Ukraine talks

Ukrainian President Volodymyr Zelenskyy was not quite as cheery after Monday’s developments, called the talks on conceding territories to Russia “painful” and “very difficult”.

He told reporters in Berlin: “Frankly speaking, we still have different positions.”

Earlier, his security officials claimed to have dealt a lethal strike to a $400m (£299m) Russian submarine in the Black Sea – a claim that Russia rejected.

“The information from the Ukrainian special services about the alleged destruction of one of Russia’s submarines is not true”, said the Black Sea Fleet command.

Not a single ship or submarine of the Black Sea Fleet in the Novorossiysk base bay, nor their crews, were injured in the sabotage, the fleet command said.

Back in Berlin, European leaders issued a joint statement on behalf of the leaders of Germany, Denmark, Finland, France, Italy, the Netherlands, Norway, Poland, Sweden, and the UK, as well as the presidents of the European Council and the European Commission.

European, US and Ukrainian officials convened in the chancellery in Berlin. Pic: AP
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European, US and Ukrainian officials convened in the chancellery in Berlin. Pic: AP

The document said the leaders “welcomed the close work between President Zelenskyy’s and President Trump’s teams, as well as European teams over the recent days and weeks”.

“They agreed to work together with President Trump and President Zelenskyy to get to a lasting peace, which preserves Ukrainian sovereignty and European security.

“Leaders appreciated the strong convergence between the United States, Ukraine and Europe.”

Outlining what they considered necessary security guarantees, the leaders said the “multinational force” should be made up of countries from the so-called Coalition of the Willing and “supported by the US”.

They also said they “strongly support” Ukraine joining the European Union, and that it should be able to maintain its armed forces at a level of 800,000.

“It will assist in the regeneration of Ukraine’s forces, in securing Ukraine’s skies, and in supporting safer seas, including through operating inside Ukraine.”

A US official said about 90% of issues between the warring parties had been resolved and that they believed Russia would be open to Ukraine joining the European Union, and to the security guarantees in the deal.

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JetBlue passenger plane and US Air Force aircraft in near miss by Venezuela

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JetBlue passenger plane and US Air Force aircraft in near miss by Venezuela

A JetBlue passenger plane took evasive action to avoid a mid-air collision with a US Air Force plane flying with its transponder turned off near Venezuela, a pilot has said in an air traffic control recording.

JetBlue Flight 1112 was flying to New York from the Caribbean nation of Curacao and was flying about 40 miles off the coast of Venezuela when the Airbus A320 reported encountering the air force refuelling tanker.

The air force pilot was within a few miles of the plane and at the same altitude.

The JetBlue pilot said on the recording: “We almost had a mid-air collision up here.

“They passed directly in our flight path… They don’t have their transponder turned on. It’s outrageous.”

The air force jet then entered Venezuelan airspace, the JetBlue pilot said.

A JetBlue spokesperson said the airline had reported this incident to federal authorities and will participate in any investigation.

The JetBlue A320 was bound for New York. Pic: Reuters
Image:
The JetBlue A320 was bound for New York. Pic: Reuters

They added that: “Our crew members are trained on proper procedures for various flight situations, and we appreciate our crew for promptly reporting this situation to our leadership team.”

US southern command – responsible for US military operations in Central America, South America, and the Caribbean – said it was aware of the incident and reviewing the matter.

They added that: “Safety remains a top priority, and we are working through the appropriate channels to assess the facts surrounding the situation.”

Last month, the Federal Aviation Administration (FAA) warned major airlines of a “potentially hazardous situation” when flying over Venezuela and urged them to exercise caution.

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Why Trump cares about Venezuela

Major airlines from around the world have halted flights as tensions have worsened and US President Donald Trump has threatened to begin hitting land targets in Venezuela.

The incident follows a fatal accident between a US military helicopter and an American Airlines flight in January that left 67 dead.

That crash, which happened in the heart of Washington DC, highlighted the importance of clear communication between civil and military aircraft when operating in the same area.

US B52 bombers have been flying over the Caribbean and along the Venezuelan coast. Pic: Reuters
Image:
US B52 bombers have been flying over the Caribbean and along the Venezuelan coast. Pic: Reuters

US military build-up in Southern Caribbean

The close call in the Caribbean happened as the US continues its military build-up in the area as President Trump campaigns to oust Venezuela’s President Nicolas Maduro.

The increase in US military presence includes flights by US bombers near Venezuela, the arrival of the world’s largest aircraft carrier and new agreements for US military assets to transit neighbouring countries.

On Monday, Trinidad and Tobago became the latest country to grant approval for US military aircraft to transit its airports in the coming weeks, according to the country’s foreign ministry.

All of these moves are aimed at increasing US pressure on Venezuela’s government.

Still of a video of US forces seizing a Venezuelan oil tanker. Pic: X/@AGPamBondi
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Still of a video of US forces seizing a Venezuelan oil tanker. Pic: X/@AGPamBondi

Last week, US forces seized an oil tanker off the coast of Venezuela, escalating tensions between Washington and Caracas.

Oil exports from Venezuela have fallen significantly since the ship’s seizure, according to shipping data and maritime sources.

Read more:
The US-Venezuela crisis explained
Who is Maria Corina Machado?

The seizure followed a large US naval build-up in the region, which has seen the US launch strikes against multiple boats purported to be smuggling drugs to America over the past few months.

The legality of such moves has been questioned but has not prevented their repeated use.

It is reported that Venezuela’s opposition leader Maria Corina Machado escaped with US help to the Caribbean Island of Curacao during a daring escape from her country – before arriving in Norway.

Pressed several times on whether she supported a possible US invasion of Venezuela to overthrow Nicolas Maduro, she would not commit outright but said the country has already been invaded by Russia, Iran and terrorist groups like Hezbollah.

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