The F.I.R.E. Report

from the Finance, Insurance and Real Estate Committee of the Mansfield Area Chamber of Commerce

March 2023

Why Silicon Valley Bank's crisis is rattling America's biggest banks

The problems of two small banks on the West Coast are rippling across markets and causing new investor concerns about some of the country's largest financial institutions. Why? Three words: rising interest rates.

Mortgage Rates Continue to Climb - March 9, 2023

The average 30-year mortgage rate has risen yet again this week to settle at 6.73%, up from 6.65% last week. Sam Khater, the chief economist at Freddie Mac, states that "mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy."

That aggressive stance that Khater is referring to showed up earlier this week when Fed Chairman Jerome Powell testified before congress that the February jobs and inflation reports would dictate the Fed's rate decision at its March 21-22 meeting. Many economists believe that both reports will show more strength in the economy than previously thought. Per Chairman Powell, the Fed is prepared to make a larger rate increase (than they did last month) if "the totality of the data" warrants it.

DFW Housing Market Saw 8% Price Increase in 2022

S&P and CoreLogic released the 2022 year end numbers for the Case-Shiller Home Price index yesterday (2/28/2023). Nationwide, home prices were up 5.76% for the entire year. In Dallas/Ft. Worth, prices were up 7.95%.

Every metro area covered by the Case-Shiller index was down for the last 3 months of 2022 as well as for the month of December. For the month of December, Dallas/Ft. Worth was down 1.08% and for the period of Sep - Dec, we were down 3.42%. The fact that DFW home prices were still higher for the year overall is a testament to the price growth we experienced during the first part of last year.

Central banks going crypto. Is it a good idea?

On the third floor of the dark cylindrical tower that is home to the Bank for International Settlements, I was faced with a sight that made me blink in surprise: white walls. This may not sound very startling, so let me explain. The BIS is the central bankers' central bank.

Property insurers are looking at yet another "worrying sign"

Furthermore, according to Garrett, this could be a sign that the tools are "not meeting customer needs". "In fact, this is the first year JD Power has ever seen declining use of digital claims reporting, digital use as a primary channel for status updates and for submitting photos that were used for the estimate," Garrett said on the release of JD Power's 2023 US Property Claims Satisfaction Study.

How prospective first-time homebuyers can succeed in today's real estate market

With higher mortgage rates and relentless competition for the few houses on the market, homeownership may feel more elusive than ever for young people in America. Our latest Profile of Home Buyers and Sellers report found that first-time homebuyers accounted for just 26% of all home purchases in the United States last year.

The U.S. Dollar Is the World's Currency Standard. That May Not Last.

The dollar's status as the preferred global means of exchange and store of value could be hurt unless a U.S. default is averted and the federal debt is put on a sustainable path. The currency's long history of ups and downs.

Capitol Hill Update

— BIDEN SET TO UNVEIL DETAILS OF FY 2024 BUDGET REQUEST. President Joe Biden is set to unveil details of his fiscal year (FY) 2024 budget request as appropriations season kicks into full gear. Today's announcement from the president will provide initial messaging priorities and brief details on each agency request, followed by the release of the full budget document next Monday. In particular, the administration is expected to outline goals for lowering the deficit and extending the solvency of the Medicare Trust Fund, as well as increasing taxes on wealthier individuals and corporations. Other proposals rumored to be a part of this year's budget include: (1) expanded support for child care and prekindergarten; (2) Medicaid expansion; (3) renewing the expired Child Tax Credit (CTC); and (4) national paid family leave, among others. The budget request is largely expected to be dead-on-arrival given strong opposition from House GOP leadership.

— HOUSE GOP STUDY COMMITTEE OUTLINES DEBT CEILING POSITIONS. The House Republican Study Committee published a memo that outlines a series of policy proposals that reflect the conservative panel's debt limit priorities released earlier this year. Proposals within the memo largely reflect the goal of setting an annual cap on discretionary spending and keeping the government funded at FY 2022 funding levels. Notable policies highlighted in the memo include:

"Stronger work requirements" for federal food assistance programs;
Rescinding unspent funds from both the American Rescue Plan (ARP) and Inflation Reduction Act (IRA);
Addressing wasteful spending by cracking down on improper payments, consolidating duplicative programs, and subjecting some mandatory programs — excluding Medicare and Social Security — to annual appropriations; and
Making the 2017 Tax Cuts and Jobs Act permanent; among others.

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