June 30, 2022

Highest Mortgage Rates Since 2008 Housing Crisis Cool Sales

Larisa Kiryukhin and her family were long ago priced out of the San Francisco Bay Area, where they had lived for decades. Ms. Kiryukhin, 44, is a medical assistant who was tied to her hospital, but the pandemic gave her husband, who works in information technology, the flexibility to move to a more affordable city. So Ms. Kiryukhin switched jobs, and this year the couple and their two children moved to Tampa, Fla., in hopes of buying a home.

In April, the family went into contract on a $425,000 house and was quoted an interest rate of 4 percent. Then the closing date was extended because the seller wanted time to find a new home. Then interest rates jumped, adding about $700 to the monthly payment, and the family backed out.

“I moved here just to buy a house, and here we go: The prices got so high we can’t afford it,” Ms. Kiryukhin said.

The typical home buyer makes about $70,000 a year, according to Moody’s Analytics. A $600-a-month increase in housing costs — about how much rising interest rates have added to the typical mortgage payment — is more than most people can shoulder.

Steve Silbar, a real estate agent in Spokane, Wash., said he had seen a sharp deterioration in interest among buyers looking for homes under $500,000. Those buyers typically have less cash, so rising mortgage rates “have moved them out of the market,” he said.

Article source: https://www.nytimes.com/2022/06/29/business/economy/mortgage-rates-housing-market.html

How Inflation Is Altering People’s Behavior

Tobias Pratt, a 31-year-old mortgage underwriter in Atlanta, decided to look for his first home in the spring of 2021. He had a well-paying job and a solid down payment, and his rent was ticking higher. Getting preapproved for a mortgage seemed like a wise move.

“I finally felt like I was in a good space to do it,” Mr. Pratt said.

But with housing prices so inflated, Mr. Pratt was quickly squeezed out of the market. He decided to try again in March because his lease was about to expire and the rent on his one-bedroom was about to rise by another $200, to $1,900. This time, high mortgage rates, which began climbing earlier this year, have narrowed his prospects even further. Instead of looking solely at single-family homes, he started considering condos — but those are expensive now as well.

“I can afford maybe two-thirds of what I could afford last year,” Mr. Pratt said, adding that the monthly mortgage payment could be as much as $700 higher, depending on the size of the loan. “But with housing prices still soaring, the inventory is limited.”

He also noticed that his grocery bill, which reliably cost about $225 for an online order placed every two weeks, had jumped to $300 in mid-March. “I was like, ‘Whoa, back up a minute,’” he said. “I looked at my last bill and I ordered pretty much the same groceries.”

That was when he decided to start tracking his spending more closely, noting expenses in a journal, looking for places to trim. He eliminated several recurring subscriptions, including Spotify and Experian’s credit tracking service; negotiated a lower-priced plan with his cellphone company; and started ordering less takeout from Uber Eats. To reduce his grocery bill, he swapped name brands for generic products, eliminated bottled water and cut back on extras.

Article source: https://www.nytimes.com/2022/06/28/your-money/inflation-consumer-behavior.html

The Pandemic Flight of Wealthy New Yorkers Was a Once-in-a-Century Shock

The outlook for this year has become much less certain as the stock market has plummeted in recent months and certain forms of federal aid, like stimulus checks and expanded unemployment benefits, have ended.

The city’s Independent Budget Office said it was not possible to calculate the tax revenue lost from the people who had moved because some of them could be working remotely for New York-based companies and paying city income tax. In the long term, the office said, their tax status could become a major policy issue as states fight for their share of taxes from remote workers.

Sophia and Charlie Blackett relocated last year to Rowayton, Conn., from Brooklyn, partly because both of their jobs in tech allowed them to permanently work from home. Ms. Blackett, 27, had previously considered raising children in the city, but the confinement of the pandemic shifted her thinking.

“I used to thrive on the hustle and bustle,” she said. Now, she said, “I think about waking up in my bed in an apartment, and I just feel a little bit anxious.”

The issue has become a talking point in the governor’s race. Gov. Kathy Hochul, a moderate Democrat, said earlier this year that the steep population drop in New York State, driven by the city losses, was “an alarm bell that cannot be ignored.” Representative Tom Suozzi of Long Island, a centrist challenging her in this month’s primary, has blamed the exodus on crime, high taxes and an unaffordable cost of living.

Gergana Ivanova, 28, a clothing designer and social media influencer, said her decision to move to Miami was less about taxes. The pandemic made the downsides of living in New York City more noticeable, she said, including the lack of space in her tiny Queens apartment and the trash piling up on the sidewalks. She felt less safe walking around when the streets were emptier.

Article source: https://www.nytimes.com/2022/06/28/nyregion/wealthy-pandemic-nyc.html

Beyoncé’s ‘Break My Soul’ and the Long Tail of ‘Show Me Love’

“Champion were obsessed with sweet and sour, they called it,” StoneBridge, now 60, recalled via phone from his studio in Stockholm. He dialed his Korg M1 synthesizer to the next preset, landing on Organ 2, and replayed his bass line. That was the bouncy, sweet part. The sour was the grinding sound that opens the song, a product of his DX100 Yamaha synth, which he played in the red to distort it. He dusted it all, as well as Robin S.’s vocal, with some delay. The result was minimal like early house music out of Chicago, but shimmering with novel sounds. StoneBridge was not sure about his concoction, but deadline compelled him to turn it in.

When Robin S. heard it, it blew her away, she said in an interview last week. Finally her song was complete.

She had recorded her vocal years before in one take (not counting the ad-libs) while suffering from the flu, she recalled over the phone from her home in Atlanta. She was initially unimpressed by the song; and then, years later with StoneBridge’s revision, its popularity exploded on a global scale. “Show Me Love” was not the first house song to feature the M1 Organ 2 sound, but it hit bigger than any that came before it.

Earlier last week, Robin S. got a call from her son informing her that she was trending on social media as a result of the apparent “Show Me Love” reference in Beyoncé’s song, which replicates that M1 Organ 2 sound (in a different rhythm). She and StoneBridge both said they had no idea what was coming. StoneBridge discovered the connection while searching for his name on Twitter.

“I didn’t know whether to laugh, to cry,” Robin S., 60, said. “Out of all the songs she has access to, out of all the songs her team has access to, she chose mine.” The singer said she was particularly touched because she’s felt that dance artists like her “don’t get their props” despite their hard work.

Article source: https://www.nytimes.com/2022/06/27/arts/music/beyonce-break-my-soul-robin-s-show-me-love.html

Drake’s ‘Honestly, Nevermind’ Is His 11th No. 1 Album

A little over a week ago, Drake announced a surprise new album, “Honestly, Nevermind,” and released it online a few hours later. Just like clockwork, it has now gone to No. 1, becoming Drake’s 11th album to top the Billboard 200 chart.

“Honestly, Nevermind,” Drake’s seventh studio LP — and his 17th full-length release overall, counting compilations and mixtapes — opened with the equivalent of 204,000 sales in the United States, including 250 million streams, according to the tracking service Luminate. Those figures were enough to send the dance-heavy “Honestly” to No. 1 by a comfortable margin. But they were low by the standards of Drake, who for more than a decade has routinely posted gigantic numbers for new work.

The album’s 204,000 equivalent sales — a measurement that reconciles streams with downloads and any traditional album purchases — are a fraction of the 613,000 that Drake posted for the opening of his last studio album, “Certified Lover Boy” (2021). And they are Drake’s lowest since “Care Package,” a compilation of previously released tracks, which opened (at No. 1, naturally) with 109,000 in 2019. Apart from “Care Package,” no Drake album has begun with fewer than half a million equivalents since “What a Time to Be Alive,” a mixtape with the rapper Future from 2015, when streaming represented a minority of overall music consumption. (As of last year, streaming makes up 83 percent of recorded music sales revenue in the United States.)

Article source: https://www.nytimes.com/2022/06/27/arts/music/drake-honestly-nevermind-billboard-chart.html

The Former Electrical Engineer Leading Disney’s Streaming Strategy

Ms. Dakhil, however, decided to investigate for herself. “I made a concerted effort to get to know Kareem and have been pleasantly surprised,” she said. “He is brimming over with high levels of EQ” — emotional intelligence — “and yet he doesn’t pretend to know everything. He’s curious and listens. And most of all, I am convinced that he really does love movies.”

Movies have been a passion for Mr. Daniel since childhood. He grew up on the South Side of Chicago, where his mother was a nurse and father a professor. He spent most Saturdays at the Evergreen Plaza multiplex, once taking in back-to-back screenings of “The Empire Strikes Back.” When it came to picking a career, however, his parents insisted on practicality — hence his dutiful decision to study electrical engineering at Stanford University.

At Disney, he is known for peppering conversations with movie lines, sometimes playfully testing subordinates to guess their origin. He collects original movie posters. Over dinner with a reporter, he discussed the plot intricacies of Paul Thomas Anderson’s “Phantom Thread,” about a couturier in 1950s London, and recited lines from “The Breakfast Club” and “The Color of Money.”

He has attended the Sundance Film Festival 21 times. “He sees more movies at Sundance than almost anyone, and he does it because he loves it,” said Sean Bailey, president of Walt Disney Studios Motion Picture Production.

Much has been made, both inside and outside of Disney, about the ways in which Mr. Chapek’s 2020 restructuring took away power from some (the people running the company’s moviemaking and television production divisions) and gave it to others (Mr. Daniel). Not helping has been confusion in the broader industry about how it all works.

Under the new setup, Mr. Daniel’s group sets a spending budget for Disney’s content factories. Using data and research, his teams also determine what type of content is needed (genre, length, targeted demographics) to drive growth on the company’s various platforms. “We share that with them so that they can go create against those needs,” Mr. Daniel said. “We don’t go to a hyper sense of specificity, of course, because we want to inform the creative process but not try to algorithmically program.”

Article source: https://www.nytimes.com/2022/06/27/business/media/kareem-daniel-disney.html

Hacking High Gas Prices: How People Are Changing Their Habits

“A hack I would love to have is car-pooling,” said Alexa Lopez. But she has not found a viable options near where she lives in Kissimmee, Fla. She has a long commute: 51 miles each day from her home to her job at a plumbing supply company in Melbourne. So to save money on gas, she has cut down on extracurricular driving, as well as some more essential activities.

Ms. Lopez, 30, used to make trips to the grocery store without thinking twice. Now, because of inflation and the high prices of getting herself to the store, she goes only every two weeks. Previously, she said, she would buy “anything and everything,” including snacks like chips for her son. But, she said, “I can’t really buy too much of those any more.”

She added, “I’m feeling like pretty much the average American right now: struggling.”

For the first time in years, some who had been doing relatively well are facing hard trade-offs. As the war in Ukraine and the pandemic continue to roil the economy, concerns are growing that the U.S. economy may be on the brink of a recession. People are moving to ease their commutes. Family visits are being minimized. Future savings are being funneled toward ballooning grocery prices. It has been a hard jolt.

Elizabeth Hjelvik, 26, a graduate student in materials science at the University of Colorado at Boulder, watches her budget closely. She recently started riding her bike to campus. She has also started working from home more often, using her parents’ Kroger fuel points to fill up the tank of her 2005 Honda and cutting back on spontaneous weekend trips.

Ms. Hjelvik recalled saying, as she and her partner were recently driving back from a trip to Fort Collins, Colo., about 50 miles away, “This drive is so beautiful, but it might be something we can’t do in the future.” Her family lives in New Mexico, within driving distance of Boulder. “Ideally we would be able to go see them more often, but it’s a lot of gas,” she said.

Kaitlyn Thomas, 25, a medical resident living in Horseheads, N.Y., said she sometimes Googles gas prices in nearby Pennsylvania. She also has a running note on her phone where she tracks what’s advertised at the stations she passes on her commute. Next week, she is moving to Sayre, Penn., in order to live within walking distance of work.

Article source: https://www.nytimes.com/2022/06/25/business/gas-prices-hacks.html

Fed Confronts a ‘New World’ of Inflation

The global supply of goods has been curtailed by one issue after another since the onset of the pandemic, from lockdowns in China that slowed the production of computer chips and other goods to Russia’s invasion of Ukraine, which has limited gas and food availability.

At the same time, demand has been heady, boosted by government pandemic relief checks and a strong labor market. Businesses have been able to charge more for their limited supply, and consumer prices have been picking up sharply, climbing 8.6 percent over the year through May.

Research from the Federal Reserve Bank of San Francisco released this week found that demand was driving about one-third of the current jump in inflation, while issues tied to supply or some ambiguous mix of supply-and-demand factors were driving about two-thirds.

That means that returning demand to more normal levels should help ease inflation somewhat, even if supply in key markets remain roiled. The Fed has been clear that it cannot directly lower oil and gas prices, for instance, because those costs turn more on the global supply than they do on domestic demand.

“There’s really not anything that we can do about oil prices,” Mr. Powell told senators on Wednesday. Still, he added later, “there is a job to moderating demand so that it can be in better balance with supply.”

But it also means that if the supply shortages that are driving so much of inflation today fail to ease, the Fed could need a more punishing response — one that weakens the economy drastically to bring demand in line — to return annual price increases to more normal 2 percent levels.

Article source: https://www.nytimes.com/2022/06/24/business/economy/fed-inflation.html

As Midterms Loom, Mark Zuckerberg Shifts Focus Away From Elections

Mr. Reynolds disputed that 60 people were focused on the integrity of elections. He said Meta had hundreds of people across more than 40 teams focused on election work. With each election, he said, the company is “building teams and technologies and developing partnerships to take down manipulation campaigns, limit the spread of misinformation and maintain industry-leading transparency around political ads and pages.”

Trenton Kennedy, a Twitter spokesman, said the company was continuing “our efforts to protect the integrity of election conversation and keep the public informed on our approach.” For the midterms, Twitter has labeled the accounts of political candidates and provided information boxes on how to vote in local elections.

How Meta and Twitter treat elections has implications beyond the United States, given the global nature of their platforms. In Brazil, which is holding a general election in October, President Jair Bolsonaro has recently raised doubts about the country’s electoral process. Latvia, Bosnia and Slovenia are also holding elections in October.

“People in the U.S. are almost certainly getting the Rolls-Royce treatment when it comes to any integrity on any platform, especially for U.S. elections,” said Sahar Massachi, the executive director of the think tank Integrity Institute and a former Facebook employee. “And so however bad it is here, think about how much worse it is everywhere else.”

Facebook’s role in potentially distorting elections became evident after 2016, when Russian operatives used the site to spread inflammatory content and divide American voters in the U.S. presidential election. In 2018, Mr. Zuckerberg testified before Congress that election security was his top priority.

Article source: https://www.nytimes.com/2022/06/23/technology/mark-zuckerberg-meta-midterm-elections.html

Inflation Complicates Biden’s Deliberations on Student Loan Forgiveness

But at the same time, he would end a pause on student loan interest payments for all borrowers, which was imposed in March 2020 and has been extended seven times, most recently until Aug. 31. That would effectively force many of those borrowers to spend less on goods and services to resume their loan payments.

Mr. Biden’s aides believe that pairing the two policies could pull a small amount of consumer buying power out of the economy. By some administration estimates, the two policies could bring inflation down very slightly. At minimum, aides say, they would cancel each other out.

“Given that fighting inflation is the president’s top domestic priority,” Jared Bernstein, a member of the White House Council of Economic Advisers, said in an interview, “the key economic fact here is that if debt payment restart and debt relief were to occur at roughly the same time, the net inflationary effect should be neutral.”

Designing a plan to be inflation-neutral, at worst, under the administration’s accounting would require limiting the debt relief to far less than what more liberal Democrats have pushed Mr. Biden to grant.

Opponents of debt cancellation would prefer Mr. Biden restart loan payments and not forgive any debt, which they say would have a better chance of dampening inflation. And they say the administration is making its inflation math appear rosier by looking at the resumption of interest payments as a new policy that could work as a counterbalance to canceling some debt, when the pause was always intended to be only temporary.

The administration’s math showing the paired policies to be neutral for inflation “is not the way I would prefer to think about it,” said Marc Goldwein, the senior policy director at the Committee for a Responsible Federal Budget, a nonpartisan fiscal watchdog group in Washington, and a critic of cancellation proposals. “But it’s not totally bizarre for somebody to think about it that way.”

Article source: https://www.nytimes.com/2022/06/22/us/politics/biden-student-debt-inflation.html