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close video Housing market preparing for ‘another headwind’ that will ‘drag’ the economy: Mark Avallone

Potomac Wealth Advisors president and founder Mark Avallone says the ‘trickle down’ effect will take hold later this year.

The U.S. housing market suffered the biggest drop in value since 2008 as home prices came crashing down.

That's according to a new report from real estate brokerage firm Redfin, which showed that the total value of U.S. homes tumbled from a record high of $47.7 trillion in June 2022 to $45.3 trillion at the end of the year — a decline of $2.3 trillion, or 4.9%. 

It marks the biggest drop in percentage terms since the 2008 financial crisis, when home values plunged by 5.8% from June to December.

During the COVID-19 pandemic, home prices soared at a pace not seen since the 1970s with mortgage rates near a record low. Homebuyers — flush with stimulus cash and eager for more space during the pandemic — flocked to the suburbs.

Demand was so strong, and inventory so low, that at the height of the market some buyers waived home inspections and appraisals or paid hundreds of thousands over asking price.

WHEN WILL US HOME PRICES FINALLY STOP DROPPING?

Homebuyers flush with stimulus cash and eager for more space during the pandemic flocked to the suburbs. (David Paul Morris/Bloomberg via Getty Images / Getty Images)

The frenzy came to a halt when the Federal Reserve embarked on the most aggressive interest-rate hike campaign since the 1980s as it tried to slow the economy and crush runaway inflation. 

The interest rate-sensitive housing market has so far borne the brunt of tighter monetary policy: Although mortgage rates have fallen from a peak of 7.08% notched in November, they have recently reversed that trend and started to march higher amid interest rate-hike fears. The average rate for a 30-year fixed mortgage climbed to 6.5% this week, according to data from mortgage lender Freddie Mac. 

That remains significantly higher than just one year ago, when rates hovered around 3.92%.

The median price of a home sold in January was $383,249, down 11.5% from a peak of $433,133 in May 2022, according to Redfin. (Jim Watson/AFP via Getty Images) / Getty Images)

Homebuyer demand dried up as consumers confronted the steepest mortgage rates in years, further weighing on home prices. The median price of a home sold in January was $383,249, down 11.5% from a peak of $433,133 in May, according to Redfin. 

"The housing market has shed some of its value, but most homeowners will still reap big rewards from the pandemic housing boom," said Chen Zhao, Redfin economics research lead. She noted the total value of U.S. homes remains roughly $13 trillion higher than in February 2020, before the COVID-19 pandemic shut down broad swaths of the global economy. 

Still, even with higher mortgage rates putting home ownership out of reach for millions of Americans, many home prices are still more expensive than they were one year ago. In December, the total value of U.S. houses was still up 6.5% from the same time one year ago. 

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Piper Sandler chief investment strategist Michael Kantrowitz shares his 2023 market outlook ahead of the January inflation data after futures data signals a continued rally.

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Jessie J cancels tour dates ahead of second breast cancer surgery

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Jessie J cancels tour dates ahead of second breast cancer surgery

Jessie J has been forced to rearrange or cancel all upcoming tour dates as she will be having a second operation as part of her treatment for breast cancer.

The 37-year-old announced in June that she had been diagnosed with early breast cancer. She had her first operation later in the same month.

The singer, whose real name is Jessica Cornish, was due to tour the UK and Europe in October, before gigs in the US in November.

In a video posted on Instagram, she’s now told fans: “Unfortunately, I have to have a second surgery, nothing too serious, but it has to be done before the end of the year and unfortunately, that falls right in the middle of a tour that I had booked.”

The UK and Europe dates have been postponed until April next year while the US tour has been cancelled.

“So that is what it is, and I’m sorry,” the performer said. “I feel frustrated and sad, but also it is what it is, and I need to be better.

“I need to be healed, and I know this is the right decision to make. So I’m postponing the tour till next year.”

The star has asked fans to “please bear with us for the US tour”, adding that it’s “something that I want to do, but when the time is right”.

“You guys know how much I want to do all of it, but I just can’t,” she said. “And I have to be realistic.”

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Jessie J has battled numerous health issues, including being diagnosed with a heart condition when she was eight years old and suffering a minor stroke aged 18.

The singer-songwriter has had three number one songs in the UK singles chart, with Price Tag and Domino – both released in 2011 – and 2014’s Bang Bang, a collaboration with Ariana Grande and Nicki Minaj.

She won the Critics’ Choice prize at the 2011 BRITs and bagged four Mobo awards in the same year.

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Controversial P&O Ferries boss Hebblethwaite to quit

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Controversial P&O Ferries boss Hebblethwaite to quit

The man dubbed “Britain’s most hated boss” for his controversial policy of sacking hundreds of seafarers and replacing them with cheaper agency staff is to quit.

Sky News can exclusively reveal that Peter Hebblethwaite, the chief executive of P&O Ferries, is leaving the company.

Sources said he had decided to resign for personal reasons.

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Mr Hebblethwaite joined the ranks of Britain’s most notorious corporate figures in 2022 when P&O Ferries – a subsidiary of the giant Dubai-based ports operator DP World – said it was sacking 800 staff with immediate effect – some of whom learned their fate via a video message.

The policy, which Mr Hebblethwaite defended to MPs during subsequent select committee hearings, erupted into a national scandal, prompting changes in the law to give workers greater protection.

Under the new legislation, the government plans to tighten collective redundancy requirements for operators of foreign vessels.

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In a statement issued in response to a request from Sky News, a P&O Ferries spokesperson said: “Peter Hebblethwaite has communicated his intention to resign from his position as chief executive officer to dedicate more time to family matters.

Peter Hebblethwaite gives evidence to a committee of MPs in 2022. Pic: PA
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Peter Hebblethwaite gives evidence to a committee of MPs in 2022. Pic: PA

“P&O Ferries extends its gratitude to Peter Hebblethwaite for his contributions as CEO over the past four years.

“During his tenure the company navigated the challenges of the COVID-19 pandemic, initiated a path towards financial stability, and introduced the world’s first large double-ended hybrid ferries on the Dover-Calais route, thereby enhancing sustainability.

“We extend our best wishes to him for his future endeavours.”

A source close to the company said it anticipated making an announcement on Mr Hebblethwaite’s successor in the near term.

A former executive at J Sainsbury, Greene King and Alliance Unichem, Mr Hebblethwaite joined P&O Ferries in 2019, before taking over as chief executive in November 2021.

Insiders claimed on Friday that he had “transformed” the business following the bitter blows dealt to its finances by the COVID-19 pandemic and – to some degree – by the impact of Britain’s exit from the European Union.

A union protest is shown at the height of the mass sackings  row in 2022
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A union protest is shown at the height of the mass sackings row in 2022

P&O Ferries carries 4.5 million passengers annually on routes between the UK and continental European ports including Calais and Rotterdam.

It also operates a route between Northern Ireland and Scotland, and is a major freight carrier.

The company’s losses soared during the pandemic, with DP World – its sole shareholder – supporting it through hundreds of millions of pounds in loans.

Its most recent accounts, which were significantly delayed, showed a significant reduction in losses in 2023 to just over £90m.

The reduction from the previous year’s figure of almost £250m was partly attributed to cost reduction exercises.

The accounts also showed that Mr Hebblethwaite received a pay package of £683,000, including a bonus of £183,000.

“I reflected on accepting that payment, but ultimately I did decide to accept it,” he told MPs.

“I do recognise it is not a decision that everybody would have made.”

The row over his pay was especially acute because of his admission that P&O Ferries’ lowest-paid seafarers received hourly pay of just £4.87.

Mr Hebblethwaite had argued since the mass sackings of 2022 that the company would have gone bust without the drastic cost-cutting that it entailed.

The company insisted at the time that those affected by the redundancies had been offered “enhanced” packages to leave.

Last October, the then transport secretary, Louise Haigh, said: “The mass sacking by P&O Ferries was a national scandal which can never be allowed to happen again,” adding that measures to protect seafarers from “rogue employers” would prevent a repetition.

“This issue has been ignored for over 2 years, but this new government is moving fast and bringing forward measures within 100 days,” Ms Haigh added.

“We are closing the legal loophole that P&O Ferries exploited when they sacked almost 800 dedicated seafarers and replaced them with low-paid agency workers and we are requiring operators to pay the equivalent of National Minimum Wage in UK waters.

“Make no mistake – this is good for workers and good for business.”

The minister’s description of P&O Ferries as “rogue”, and suggestion that consumers should boycott the company, sparked a row which threatened to overshadow the government’s International Investment Summit last October.

Sky News’s business and economics correspondent, Paul Kelso, revealed that DP World had withdrawn from participating in the event, and paused a £1bn investment announcement.

The company relented after Sir Keir Starmer publicly distanced the government from Ms Haigh’s characterisation of DP World.

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Vladimir Putin may be playing for time while he carries on beating down Ukraine’s will to win

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Vladimir Putin may be playing for time while he carries on beating down Ukraine's will to win

After all those raised hopes of peace, Ukraine has been hit by the second-worst night of Russian air attacks since the war began.

So much for diplomacy, despite the Alaska summit, then the Washington DC meeting.

The Kremlin says it was aiming at military targets, but yet again, the pictures tell a very different story.

Follow latest: UK summons Putin’s ambassador

Firefighters work at the site of a burning building after a Russian attack in Kyiv, Ukraine. Pic: AP
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Firefighters work at the site of a burning building after a Russian attack in Kyiv, Ukraine. Pic: AP

One civilian building after another was hit, more than a dozen people were killed, and British Council and EU buildings were also damaged.

So what’s going on? Why is Vladimir Putin doing it?

Because he can.

The Russian president thinks he’s winning this war, and it’s hard to escape the conclusion that he’s using diplomacy to play for time while he carries on beating down the Ukrainians’ will to win.

And at the moment, no one is stopping him

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At least 14 killed in Kyiv attack

Ukraine is hitting back, particularly at Russia‘s oil installations, more of them going up in thick black smoke, after being hit by long-range Ukrainian drones.

It is taking a heavy toll on Putin’s ‘Achilles heel’, but on its own, analysts don’t expect it will be enough to persuade him to end this war.

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British Council building hit in Kyiv

The West can wring its hands in condemnation.

But it’s divided between Europe that wants a ceasefire and much more severe sanctions, and Donald Trump, who, it seems, does not – strangely always willing to sympathise with the Russians more than Ukraine.

He’s back to blaming Ukraine for starting the war, saying earlier in the week that Kyiv should not have got into a war it had no chance of winning.

It is a grotesque perversion of history. Ukraine, of course, had no choice but to fight to defend itself when it was invaded in an act of unprovoked aggression.

Every time the US president has condemned Russia for these kinds of attacks, he has never followed through and done nothing to punish them.

Rescue workers carry an injured woman after a Russian strike on Kyiv, Ukraine. Pic: AP
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Rescue workers carry an injured woman after a Russian strike on Kyiv, Ukraine. Pic: AP

More worryingly for the Ukrainians, the Russians are getting the upper hand in the drones war, taking Iranian technology and souping it up into faster-moving drones that the Ukrainians are having increasing difficulty bringing down.

They expect as many as a thousand drones a night coming their way by the winter, and many, many more innocents to die.

Next week, Putin will join Chinese and North Korean leaders in a summit in Beijing, both supporting his war in Ukraine.

(L-R) Vladimir Putin, Xi Jinping and Kim Jong Un. Pics: Reuters
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(L-R) Vladimir Putin, Xi Jinping and Kim Jong Un. Pics: Reuters

Read more from Dominic Waghorn:
Ukrainians warn they’re in danger of losing drone arms race
We are further away from peace now than we were two weeks ago

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A war that began as one man’s mad idea has, in three and a half years, metastasised into a titanic struggle between east and west, fought increasingly with machines in a dystopian evolution of war.

If Mr Trump is not prepared to use his power to bring this war to an end, what will another three and a half years of his presidency bring?

It is a chilling question.

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