(NEW YORK) — Sky-high mortgage rates have helped slam the brakes on the housing market, recent data shows.
Mortgage rates climbed to their highest levels in 21 years, Freddie Mac data showed last week. The 30-year fixed-rate mortgage averaged 7.09% over the week ending on Thursday, after sustaining levels above 6.5% since May.
The home resale market, meanwhile, slowed in July to its lowest rate since 2010,National Association of Realtors data showed on Tuesday.
A shortage of supply has kept housing prices elevated, stunting home purchases as prospective buyers stand crunched between twin pressures of expensive borrowing costs and stubbornly high listing prices, analysts said.
The dynamic is unlikely to change markedly in the coming months, since both home prices and mortgage rates are expected to remain at or near current levels, they added.
Contrasting the current market with the low-mortgage rate environment that took hold during the COVID-19 pandemic, Bess Freedman, the CEO of real estate firm Brown Harris Stevens, told ABC News: “It’s not champagne and caviar anymore. The party is over.”
“Buyers are on the fence and struggling with a lack of inventory and higher mortgage rates,” Freedman added. “The next few months will most likely be similar.”
The Federal Reserve has put forward an aggressive string of interest rate hikes as it tries to slash inflation by slowing the economy and choking off demand.
That means borrowers face higher costs for everything from car loans to credit card debt to mortgages.
When the Fed imposed its first rate hike of the current series in March 2022, the average 30-year fixed mortgage stood at just 4.45%, Mortgage News Daily data shows.
Each percentage point increase in a mortgage rate can add thousands or tens of thousands in additional cost each year, depending on the price of the house, according to Rocket Mortgage.
“It’s all about the Fed,” Lawrence Yun, chief economist at the National Association of Realtors, told ABC News.
Many homeowners have resisted selling because they don’t want to give up their relatively low mortgage rates, Yun said, while some buyers are scared off by the added borrowing costs.
If interest rates climb further, it will worsen the “logjam,” he added. If borrowing costs turn lower, it could flood the market with buyers and sellers.
“Cutting interest rates would immediately bring down mortgage rates,” Yun said.
In theory, high mortgages should bring down housing prices, since the added borrowing costs raise the overall cost of homes and scare off buyers, Gregg Coburn, a real estate professor at the University of Washington, told ABC News.
However, a shortage of supply in some regions has left prices resistant to the downward pressure, Coburn added.
“Scarce supply keeps prices higher than they otherwise would be in the face of higher interest rates,” Coburn said.
In addition to the economic forces slowing activity, the housing market tends to cool down during the fall months, Orphe Divounguy, senior economist at Zillow, told ABC News.
“That’s just housing market seasonality — it’s normal,” Divounguy said. “I expect the next couple of months to slow down a little bit, especially with mortgage rates where they are.”
Still, Divounguy sounded a note of optimism, pointing out that a strong influx of new homes is expected to come online over the coming months, helping to ease the imbalance between supply and demand. That could help ease the burden on homebuyers, he added.
“Buyers are going to get a little bit more breathing room,” he said.
Prospective homebuyers should weigh their budget and urgency against the market conditions, analysts said, noting that the right home can be still be found during a slow period.
“Even in a crisis, there are opportunities,” said Freedman.
Yun cautioned that a better deal may not materialize in a hotter, low-mortgage rate market down the road.
“Maybe there will be more choices,” Yun said. “But lower interest rates mean more buyers. I would say to consumers, don’t overstretch your budget but look at any new listing that comes out. Maybe you’ll be lucky and there won’t be any buyers.”
(NEW YORK) — The Writers Guild rejected the latest offer from TV and movie studios in a statement on Tuesday night, thrusting the acrimonious negotiations into public view 113 days after Hollywood writers went on strike.
The three-year contract offer includes a combined 13% pay hike over the term of the deal, an increase in residual payments and a vow that writers “will not be disadvantaged” if any part of a script is written by general artificial intelligence, according to a statement on Wednesday from The Alliance of Motion Picture and Television Producers, or AMPTP, the group negotiating on behalf of the studios.
Under the deal, the studios will also share confidential viewership data with the union every three months and guarantee a 10-week minimum work period, the AMPTP said, noting that the proposal “substantially improves” upon previous offers.
Rebuking the offer, the Writers Guild said it features “limitations and loopholes and omissions” that fail “to sufficiently protect writers from the existential threats that caused us to strike in the first place.”
A negotiating committee for the union met on Tuesday with Disney CEO Bob Iger, Warner Bros. Discovery CEO David Zaslav and AMPTP President Carol Lombardini, as well as other executives, the Writers Guild said.
Union officials attended the meeting in “good faith” but received “a lecture about how good their single and only counteroffer was.”
“This wasn’t a meeting to make a deal,” the statement from the union said. “This was a meeting to get us to cave.”
“This was the companies’ plan from the beginning — not to bargain, but to jam us. It is their only strategy — to bet that we will turn on each other,” the union added.
In a statement, Lombardini said the recent offer from TV and movie studios reflects their desire to resolve the labor dispute.
“Our priority is to end the strike so that valued members of the creative community can return to what they do best and to end the hardships that so many people and businesses that service the industry are experiencing,” Lombardini said.
“We have come to the table with an offer that meets the priority concerns the writers have expressed,” Lombardini added. “We are deeply committed to ending the strike and are hopeful that the WGA will work toward the same resolution.”
Thousands of television and movie writers went on strike in May. The contract dispute follows a decade-long shift to streaming that has slashed writer pay and worsened working conditions, the unions, which belong to East and West Coast branches of the Writers Guild of America, said in a previous statement.
The writers’ strike has coincided with a work stoppage undertaken by a union representing representing roughly 160,000 actors, bringing activity in Hollywood to a halt.
As with writers, the streaming model has slashed the residual payments received by actors when their shows or movies are re-aired, according to the Screen Actors Guild-American Federation of Television and Radio Artists, or SAG-AFTRA.
In a statement on Tuesday, the Writers Guild vowed to continue its strike.
“We will see you all out on the picket lines and let the companies continue to see what labor power looks like,” the union said.
(NEW YORK) — Target’s sales declined over a three-month period for the first time in six years, the company announced last week, attributing the loss in part to what the company’s Executive Vice President Christina Hennington described as the “strong reaction” to its Pride month display.
An anti-LGBTQ boycott against Target erupted in May over the company’s Pride merchandise, prompting it to remove some items from stores after employees faced harassment.
The sales dent at Target marks the latest sign of success for rightwing consumer activists following the monthslong slump for Bud Light that coincided with a boycott over a product endorsement from trans influencer Dylan Mulvaney.
Consumer boycotts typically fail but the recent protests have thrived in a contentious cultural moment steeped in political division, exacerbated by the onset of the 2024 presidential election and supercharged by social media, experts told ABC News.
Moreover, the successes could fuel further attempts, emboldening anti-LGBTQ activists and imperiling companies, they added.
“In a hyper-partisan environment, where it’s easy to inflame passions, people are eager to take their effort in some direction,” Maurice Schweitzer, a professor at University of Pennsylvania’s Wharton School of Business who studies consumer movements, told ABC News.
“This has become a cultural battleground,” Schweitzer added. “I expect them to try this more.”
Target faced a wave of criticism among conservatives in May when anti-LGBTQ backlash nationwide boiled over into a boycott of the company and reported employee harassment.
Comparable sales fell 5.4% over the three months ending in June compared to the same period last year, a Target earnings release showed. E-commerce sales plunged 10.5%, the data said. Still, the company’s profits exceeded analyst expectations.
On an earnings call on Wednesday, Christina Hennington, executive vice president and chief growth officer at Target, said the company is weighing changes to its Pride display in response to the protests.
“Our goal is for our assortment to resonate broadly and deliver on the Target brand promise,” Hennington said. “In this case, the reaction is a signal for us to pause, adapt, and learn so that our future approach to these moments balances celebration, inclusivity, and broad-based appeal.”
Echoing the sentiment, Target CEO Brian Cornell said on the call: “Specific to pride and heritage months, we’re focused on building assortments that are celebratory and joyous with wide-ranging relevance, being mindful of timing, placement and presentation.”
Target did not immediately respond to ABC News’ request for comment.
In a statement that followed the onset of anti-LGBTQ backlash, in May, Target said it removed some products from this year’s Pride collection because the company “experienced threats impacting our team members’ sense of safety and well-being while at work.”
“Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year,” the company said in the statement.
Gerald Davis, a professor of management at the University of Michigan Graduate School of Business who studies consumer boycotts, said a possible policy shift would energize anti-LGBTQ activists.
“If the company caves and boycotters claim the scalp, you’ll see more of it,” Davis said.
During recent boycotts against Anheuser-Busch and Target, the protests gained momentum after the initial response from the company was perceived as conciliatory by some LGBTQ advocates, prompting frustration on the left, Davis added.
U.S. sales at Anheuser-Busch declined by more than 10% over the three months ending in June compared to the same period last year, according to the company’s earnings report released earlier this month. Meanwhile, Anheuser-Busch’s core profit in the U.S. fell by more than 28%, the fresh data showed.
“They were getting backlash from both sides because they didn’t stick to their principles,” Davis said.
To be sure, the decline in Target sales owed in part to factors separate from the consumer boycott, analysts said, such as a post-pandemic shift toward buying services instead of goods and consumer fatigue amid persistent inflation.
“Retail itself is going through a transformation,” Vanitha Swaminathan, a professor of marketing at the University of Pittsburgh, told ABC News. “You have to be careful to not conflate correlation with causation.”
Swaminathan noted, however, that political polarization has thrust corporations into the crosshairs of heightened consumer scrutiny.
“We have changed as a society,” Swaminathan said. “We’re more divided now than we were previously. These divisions are being starkly exposed through these boycotts.”
The effectiveness of recent boycotts elevates them as a viable political tool, fueling a cycle of further use that could deliver additional proof of success, Victor Asal, a professor of political science at the University of Albany who studies extremism, told ABC News.
“Successful political mobilizations can often lead to more,” Asal said. “This isn’t going away anytime soon.”
(NEW YORK) — Generation Z is racking up more credit card debt than previous generations, while Generation X holds the highest average of credit card debt, according to recent data from Credit Karma.
Between April and June 2023, Gen Z, people born between 1997 and 2012, had an average credit card balance of $3,328, a 4.23% increase from January to March 2023, where their average balance was $3,193, according to Credit Karma.
“I think that’s the effect of COVID. I think Gen Z was able to spend more on things like electronics, computers and streaming services, while older generations’ spending patterns decreased,” Dr. Balbinder Singh Gill, an assistant professor of finance at the School of Business at Stevens Institute of Technology, told ABC News.
Credit card balances for Americans hit a record $1 trillion this year, according to a report from the Federal Reserve Bank of New York.
Between April and June 2023, credit card balances increased by $45 billion, an over 4% increase from the previous quarter, the New York Federal Reserve said in its report.
The increase was the largest in total household debt, which reached $17.6 trillion in the second quarter of 2023. “Other balances, which include retail credit cards and other consumer loans, and auto loans increased by $15 billion and $20 billion, respectively,” according to the New York Federal Reserve.
While credit card debt increased the most among Gen Z in the second quarter of the year, Gen Z holds the least amount of debt, while Gen X, individuals born between 1965 and 1980, hold the most, according to Credit Karma data.
Gen X had an average credit card balance of $9,589 between April and June, a 1.89% increase from the previous quarter, according to Credit Karma. Baby Boomers, those born between 1946 and 1964, have the second-highest credit card debt, at about $8,192, according to second-quarter data from Credit Karma.
“Baby Boomers and the Silent Generation are outspending their younger counterparts in leisure spending,” Gill said.
The spending growth for older generations is outperforming that of younger generations, according to data from Bank of America.
“Older households benefited from the cost-of-living adjustment, social security increase and typically have significantly more wealth, while younger generations are more exposed to higher housing costs and the pending end of the student loan repayment moratorium,” Bank of America said in a June 2023 report.
Older generations are splurging on cruises and restaurants and dining out more than younger consumers, who are spending more on housing and basics, according to Gill. However, they’re vastly spending more in pharmacies because they tend to take more medications.
Gen X are at the peak of their careers and are earning a lot more money, Gill told ABC News.
“They’re earning a lot, they want to spend a lot and they have a very expensive lifestyle,” Gill said. “They have much larger households and they’re willing to spend very big on consumer goods and services, and they’re willing to do big investments like buying homes and cars.”
Millennials, individuals born between 1981 and 1996, saw the second-highest increase in credit card debt between April and June at 2.55%, with an average debt of $6,959, according to Credit Karma.
Credit card spending habits for Millennials mostly involve hobbies, buying clothes and the latest electronics, and going out with friends, according to Gill.
Gill said that Gen X being at the peak of their careers leads to higher purchasing power, and can buy homes and other things.
“Younger generations are moving quickly,” Gill told ABC News. “Meaning they are willing to relocate for jobs, so the desire to purchase a home will go down.”
The climbing cost of living stemming from high inflation and stagnant wages compared to increased expenses, is why credit card usage is on the rise, which is a sign of systematic failures of the market for households, according to Gill.
Credit card delinquency rates during the pandemic were “extraordinarily low” but considerably worsened during the second quarter of 2023, according to the Federal Reserve Bank of New York.
“Credit card balances saw brisk growth in the second quarter,” Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed, said in a press release. “And while delinquency rates have edged up, they appear to have normalized to pre-pandemic levels.”
Baby Boomers led the generations as the group who paid off the most credit card debt between 2021 and 2023, having decreased their credit card balances by 35.4% during that time, according to data from LendingTree.
Gen X followed Baby Boomers by decreasing their balances by 7.2%, the data shows.
Millennials and Gen Z, however, acquired significant credit card debt between 2021 and 2023, increasing their balances by 26.2% and 174%, respectively, according to LendingTree.
“I have two dogs, so a lot of doggy care goes there and since I am in grad school and don’t really work, most of my hair appointments go on my credit card,” Kayla Wilson, a 23-year-old graduate student living in Philadelphia, told ABC News.
Wilson said her credit card is maxed out at $5,000, and she pays her rent and groceries using her card, as well as some streaming services for entertainment.
She doesn’t, however, use her credit card to pay for her travels, and prefers using cash.
“Once I pay this [credit card] off, I want to get an airline credit card and use that for travel,” Wilson said
(NEW YORK) — Three days after Election Night 2020, dozens of CEOs from the nation’s largest companies logged into a Zoom call aiming to prevent the collapse of American democracy, according to several attendees who spoke to ABC News.
The night before, then-President Donald Trump had falsely declared victory in an address at the White House, pointing to a count of what he called “legal votes.”
“The CEOs were horrified,” Yale University Professor of Management Jeffrey Sonnenfeld, who convened the meeting, told ABC News. Hastily assembled, some of the chief executives showed up to the early-morning call in pajamas and most expressed grave concerns, he added.
Sonnenfeld and other meeting attendees declined to identify the CEOs who participated in the call, since they did so on condition of anonymity.
“There was recognition that if Trump pulled this off, it could turn the U.S. into something other than the country it was,” Tom Rogers, the founder of CNBC and a meeting participant, told ABC News.
The Business Roundtable, a trade association representing 200 top CEOs, including JPMorgan Chase CEO Jamie Dimon and Walmart CEO Doug McMillon, released a statement the next day affirming the outcome of the election.
Weeks later, the Business Roundtable released another bulletin condemning the January 6 attack. On a follow-up conference call in mid-January, a survey of the CEOs in attendance showed nearly unanimous support for impeaching Trump, Sonnenfeld said. Many major companies also publicly promised to halt campaign donations to members of Congress who had voted against certification of the election results.
As another presidential election nears, Trump continues to deny the outcome of the previous election and vows to vigorously fight scores of felony charges, including allegations in two separate indictments of an illegal attempt to overturn the 2020 presidential election outcome. He has pleaded not guilty to all charges on which he has been arraigned, and has denied wrongdoing in response to all related allegations. All the while, he has emerged as a formidable Republican frontrunner for the 2024 presidential election.
If elected, Trump has vowed to pursue perceived enemies, including in the Department of Justice, which is currently investigating him, and to go after familiar targets for Republicans, like President Joe Biden.
Corporate America, meanwhile, has largely receded from public comment on the issue of protecting federal elections. While some companies stood by their pledge to halt campaign contributions to election deniers, many resumed donations within a year, according to a report from the nonpartisan Citizens for Responsibility and Ethics in Washington.
In private, many CEOs acknowledge that democracy remains under threat, but business leaders face an increasingly fraught political environment as they weather Republican-led attacks over issues like socially conscious investing and diversity, equity and inclusion programs, former company executives and advocacy group leaders told ABC News, drawing on conversations with C-suite officials at large companies.
When asked about the democratic threat posed by Trump, Thomas Glocer, the former CEO of Thomson Reuters, said, “I worry about it — others do, too.”
“CEOs are now a little bit more reticent to step into the breach because the costs are more obvious,” added Glocer, who also attended the Zoom call in November 2020. “The real test becomes: When do people worry enough?”
This month, a rating agency downgraded U.S. credit for the second time in the nation’s history. Fitch Ratings cited the ballooning U.S. debt load and a weakening of governance, as well as the Jan. 6 attack on the U.S. Capitol, as considerations in their decision.
While it carries few short-term implications, the move marks a significant milestone on a path of increasing U.S. debt that could ultimately raise the nation’s borrowing costs and threaten economic growth, analysts previously told ABC News.
“A stable democracy is in the interest of business,” Daniella Ballou-Aares, CEO and co-founder of the Leadership Now Project, a membership organization made up of business leaders concerned about the future of U.S. democracy, told ABC News. “When you see political retribution and when you see a lack of faith in elections, it’s really dangerous for business.”
Trust in major institutions, including big business, has fallen significantly since the late 1970s, Gallup data shows. While surveys show 69% of Americans held at least some confidence in big business in 1979, by this year, the share who felt that way had declined to 56%.
Trust in corporate America has eroded recently in part due to the nation’s deep political divide, stoking scrutiny among some partisans regarding whether companies have sided with the opposing party, Richard Pildes, a constitutional law professor at New York University, told ABC News. Still, the trust that does remain offers CEOs an important role in preserving democratic stability, he added.
“There is definitely concern about not seeming to be engaged in partisan politics,” said Pildes, who also attended the Zoom call with CEOs in November 2020. “But on the other hand, many of them don’t feel they can stand back and just kind of passively ignore threats to the democratic process. Business leaders still have a lot of credibility with the public.”
So far, top business leaders have largely remained quiet about Trump’s 2024 candidacy and whether it poses a democratic threat. Some previous donors, including Blackstone CEO Stephen Schwarzman, have vowed to forego contributions to Trump this time around. In May, JPMorgan Chase’s Dimon sharply criticized remarks made by Trump over the debt ceiling dispute, telling Bloomberg Television that the issue is just “one more thing he doesn’t know very much about.”
Business leaders remain torn over whether to publicly address threats facing U.S. democracy, including Trump, former executives and advocacy group leaders told ABC News, citing conversations with CEOs.
Some CEOs are holding out for the possibility that Trump will fail to secure the Republican presidential nomination, or that he will face devastating political consequences if he were to be convicted on any of the criminal charges he faces, they added.
“The willingness of business and business leaders to be proactive in this period in between [presidential elections] is mixed,” said Ballou-Aares, of the Leadership Now Project. “I think people are waiting a little bit around the primary.”
Elizabeth Doty, the Director of the Erb Institute’s Corporate Political Responsibility Taskforce at the University of Michigan, said Trump looms over conversations with C-suite officials about the 2024 election, even if his name isn’t mentioned.
“There are allusions to a volatile, wild ride coming down the pike,” Doty told ABC News. “My sense is that as election season starts to heat up in the fall, that will be on their radar and there’s a sense of dread.”
Sonnenfeld, who convened the November 2020 conference call with top CEOs, described them as “anxious” about Trump’s 2024 bid. However, he added, “they might be idealistic or naive. They don’t believe Trump will be the candidate in the final run of things.”
CEOs would speak out again if the 2024 presidential election brings a crisis akin to the previous contest, Sonnenfeld said. “I’m 100% certain,” he added. “They’re not looking for a fight but they will meet the moment.”
While affirming that CEOs would take action again in such circumstances, Ballou-Aares said she hopes they take steps sooner to help prevent a potential crisis like the one that followed the 2020 election. “We would like to do everything possible to avoid that,” Ballou-Ares said.
“I definitely think there’s been more business can do in the next year to create some bright lines of what are things that would be real threats to democracy that they’re willing to push back on if they occur,” Ballou-Ares added.
Daniel Kinderman, a professor of political science and international relations at the University of Delaware, who studies the role of business in safeguarding democracy, echoed that sentiment.
“Business leaders should decide what red lines they’re willing to stand for,” Kinderman told ABC News. “What aspects of our Constitution and our democratic positions are we willing to speak out and defend when those red lines are crossed?”
ABC News’ Tal Axelrod also contributed to this story.
ABC News Senior Reporter Emmanuelle Saliba speaks with Adobe General Counsel and Chief Trust Officer Dana Rao. — ABC News
(NEW YORK) — Experts tell ABC News that the rise of generative artificial intelligence is making it more challenging for the public to tell fact from fiction — and with the 2024 presidential race only a little more than a year away, some are worried about the risk from deceptively fake political content.
Generative AI is the use of artificial intelligence tools capable of producing content including text, images, audio and video with a simple prompt.
From images falsely depicting what appears to be President Joe Biden in a Republican Party ad to an outside political group supporting Florida Gov. Ron DeSantis’ White House bid using AI technology to fabricate former President Donald Trump’s voice, new tools are giving candidates or their supporters the ability to produce hyper-realistic fakes in order to advance partisan messages.
But a coalition of companies, working together as the Content Authenticity Initiative, is developing a digital standard that they hope will restore trust in what users see online.
“If you don’t actually have transparency and a level of authenticity on the images and videos you’re seeing, you could be easily misled without knowing the difference,” explained Truepic’s Mounir Ibrahim, who told ABC News in a segment that aired Sunday on “This Week” that the company’s camera technology adds verified content provenance information — like date, time, location — to content taken with their tool.
Truepic said it is currently being used by both nongovernmental organizations documenting war crimes and commercial partners, like insurance companies, to verify the authenticity of images of damage. But Ibrahim thinks there’s a use case for 2024 candidates who want to prove the content they post is authentic.
“Think about the way in which we make our decisions on who we vote for, what we believe: So much of it is coming from what we see or hear online,” he said.
Adobe’s chief trust officer and general counsel, Dana Rao, agreed: “I think it’s really critical for governments to think about this seriously.”
“They’re communicating directly with our citizens, and they’re doing it more than ever on the internet, through social media platforms and other online digital audio and video content,” Rao said.
He told ABC News that the Content Authenticity Initiative’s digital standard would allow creators to display “content credentials,” about the entire history of that piece of content — including how it was captured and if and how it was edited.
The goal is to have those credentials displayed wherever the piece of content publishes online, whether through a website or a social media platform.
“The key part of what we’re offering is this is a solution to let you prove it’s true,” Rao said. “And that means the people who are using content credentials, they’re trying to tell you what happened. They want to be transparent.”
“[And as a consumer] you get to look at that information. You get to decide for yourself whether or not you want to believe it,” Rao said.
Both he and Ibrahim acknowledged that bad actors trying to deceive people would not use this standard — but the hope would be for creators to more broadly adopt it such that their content will be set apart with information that attests to its authenticity.
Adobe said they are having productive conversations with social media platforms, but none of them have so far joined the Content Authenticity Initiative or agreed to let users display the new content credentials on their sites.
ABC News has reached out to Meta, which owns Facebook and Instagram, and TikTok for comment as well as X, the platform formerly known as Twitter.
“They could do this tomorrow. There’s no barrier to entry here,” said University of California, Berkeley, computer science professor Hany Farid, who said that content credentials are a free open-source technology that companies can easily implement.
Farid specializes in digital forensics and said generative AI threatens to erode already embattled information ecosystems.
“For the last few [presidential] election cycles, the difference between one candidate and the other is measured in tens of thousands of votes. There’s a handful of states, a handful of districts, where you move 50,000 votes in one direction or another — that’s the ballgame,” Farid said. “And between social media, outward manipulation, fake content, existing distrust of governments and media and scientists, I don’t think that’s out of the question. And that, to me, is worrisome that our very democracy we’re talking about here is at stake.”
But Farid said he’s hopeful that the conversations happening now — not just with technology companies but lawmakers — will lead to industry-wide change.
“I think our regulators are asking a lot of good questions, and they’re having hearings, and we’re having conversations and we’re doing briefings and I think that’s good,” Farid said. “I think we have to now act on all of this.”
(NEW YORK) — Mortgage rates have climbed to their highest levels in 21 years, according to data released by Freddie Mac on Thursday.
The 30-year fixed-rate mortgage averaged 7.09% over the week ending on Thursday, marking a significant increase from 6.96% the week prior, the data showed.
The Federal Reserve has put forward an aggressive string of interest rate hikes as it tries to slash inflation by slowing the economy and choking off demand.
That means borrowers face higher costs for everything from car loans to credit card debt to mortgages.
When the Fed imposed its first rate hike of the current series in March 2022, the average 30-year fixed mortgage stood at just 4.45%, Mortgage News Daily data shows.
Each percentage point increase in a mortgage rate can add thousands or tens of thousands in additional cost each year, depending on the price of the house, according to Rocket Mortgage.
The average 30-year fixed mortgage has stood above 6.5% since May, Freddie Mac data shows. In November, the rate reached 7.08%, the previous high during the current rate hike cycle.
The rise in home-buying costs has slowed demand, but the primary cause of a stalled housing market is a lack of supply, Freddie Mac said in a statement on Thursday.
So far, the rate hikes appear to have slowed but not imperiled the nation’s economic growth.
In June, a major upward revision of government data showed gross domestic product increased at a 2% annualized rate for a three-month period ending in March — a sizable jump from the previous estimate of 1.3%.
The Fed staff no longer forecasts a recession for the U.S., Federal Reserve Chair Jerome Powell said at a press conference in Washington, D.C., last month.
Meanwhile, interest rate hikes have helped inflation well below its peak last summer of over 9%, but it remains more than a percentage point higher than the Fed’s target rate.
After a monthslong cooldown, consumer prices accelerated slightly to 3.2% in July compared to a year ago, reversing some of the progress achieved in the inflation battle.
The last time the average 30-year fixed mortgage exceeded current rates, in March 2002, the rate stood at 7.18%, Freddie Mac data shows. Two years earlier, rates topped out at 8.64%.
The outlook for mortgage costs depends in part on whether the Fed chooses to continue raising interest rates. The central bank is set to make its next interest rate decision in mid-September.
(NEW YORK) — Special counsel Jack Smith earlier this year sought extensive data, including direct messages, tied to former President Donald Trump’s account on X, formerly known as Twitter, court filings unsealed on Tuesday show.
The pursuit came amid pushback from X centered on a non-disclosure agreement that prevented the company from informing Trump about a search warrant centered on his account, according to an opinion issued by the district court judge who ruled on the case.
Balking at X’s maneuver, U.S. District Judge Beryl Howell called the effort “extraordinary,” saying the social media platform had never put forth this type of challenge since its founding 17 years prior, the opinion says. Going further, Howell speculated about whether X owner Elon Musk was trying to “cozy up” with Trump, according to a district court hearing transcript.
The Special Counsel’s office argued that the disclosure of the search warrant to Trump would compromise its investigation. Attorneys for X, by contrast, said that the order forbidding it to inform Trump amounted to a violation of its First Amendment right to speak freely, according to the district court opinion’s summary of the case.
Ultimately, a three-judge circuit court panel upheld the district court’s opinion, keeping Twitter bound by the non-disclosure agreement, the circuit court opinion shows. The panel is comprised of two appointees of President Joe Biden and one appointee of former President Barack Obama.
X did not immediately respond to ABC News’ request for comment.
In its argument challenging the non-disclosure order, X had argued that compliance with it could preclude Trump from asserting executive privilege over communications he made with his account on the platform, the circuit court opinion adds.
In addition, X was held in contempt of court for missing a deadline to comply with the search warrant. As a result, X faced $350,000 in fines, according to the circuit court opinion.
Trump has entered not guilty pleas in two cases brought by the Special Counsel: One that alleges he illegally retained possession of classified documents, and another that accuses him of attempting to overturn the results of the 2020 election. He has denied wrongdoing.
The newly unsealed district court documents reveal the extent of the data prosecutors were seeking, including the content of all direct messages sent, received or in draft form, the content of all tweets created and drafted, devices used to login or access Trump’s X account, IP addresses used to create, login or use the account and any privacy settings and communications with X and any person regarding Trump’s account.
In January, a district court filing shows, prosecutors applied for and were granted a search warrant for the data tied to Trump’s account on X.
When the government initially served Twitter for information on Trump’s account, they encountered what appeared to be technical difficulties followed by a formal objection to handing over the data by the company on Feb. 1 — four days after the compliance deadline, according to the district court opinion.
The search warrant was ultimately fulfilled roughly two weeks after the deadline, the opinion shows.
Trump was permanently suspended from X two days after the Jan. 6 assault on the Capitol over what the company said at the time was “the risk of further incitement of violence.”
Musk reinstated Trump’s account shortly after taking control of the company last year, though Trump has not yet returned to posting with his old account.
In February of this year, in sealed court proceedings, Howell rejected X’s arguments and held the company in contempt — while giving it an opportunity to purge its contempt by producing Trump’s account information.
The government suggested sanctions against the company should accrue at a rate of $50,000 per day, to double each day X failed to comply — citing Twitter’s sale to Musk and Musk’s reported net worth, a circuit court opinion shows.
Although X produced some records from the account later that day, “its production was incomplete,” the Special Counsel’s office said, according to the opinion. X did not hand over the full amount of required data in compliance with the warrant until three days later, which the government argued merited a total fine against the company of $350,000.
The district court agreed, finding X in civil contempt and ordering a $350,000 sanction, according to the court’s opinion.
While X appealed the district court ruling, the government filed a separate motion in June that proposed to permit X to notify Trump of the existence of its warrant against his X account. The government later changed its position due to other information that had surfaced at the time “about investigations of the former President [that became publicly available],” the circuit court order says.
In finding X’s arguments against the non-disclosure order unconvincing, the circuit court judges write, “the whole point of the nondisclosure order was to avoid tipping off the former President about the warrant’s existence.”
“Because the nondisclosure order was a narrowly tailored means of achieving compelling government interests, it withstood strict scrutiny,” they ruled.
(NEW YORK) — A New Jersey federal judge has ordered Starbucks to pay a former employee who was awarded $25.6 million in a wrongful termination suit an extra $2.7 million in damages.
Shannon Phillips, a former regional director for the chain, sued the coffee giant in 2019, claiming that she was fired for being white.
On Wednesday, Judge Joel Slomsky ordered Starbucks to pay Phillips $2,736,755 in back pay, front pay and tax gross, court documents show.
The ruling comes after a Camden jury ordered the coffee giant to pay Phillips $25.6 million in settlement money, including punitive and compensatory damages, following a trial in June.
Phillips, 52, claimed in her lawsuit that “her race was a determinative factor” in Starbucks’ decision to fire her in the wake of a 2018 racial firestorm.
In April 2018, two Black men — Donte Robinson and Rashon Nelson — were arrested while waiting for a business meeting after an employee called 911 and accused the men of trespassing after they refused to make a purchase or leave the store. The arrests sparked nationwide protests and prompted Starbucks to close some of its stores for a day for racial bias training.
Less than a month after the arrests, Phillips was notified of her termination, despite claiming that she wasn’t at the store that day and was not involved in the arrests in any way.
Phillips, who had been employed by Starbucks for nearly 13 years at the time of her termination, claims she “actively worked” on “crisis management” efforts and “took steps to ensure that the retail locations within her area were a safe and welcoming environment for all customers, regardless of race,” according to her 2019 civil complaint.
In a memo opposing economic damages filed last month, Starbucks argued that Phillips “has failed to present any evidence that she could not earn the same (or perhaps even more) in the future and has similarly presented no evidence, beyond her speculation, as to what benefits she may have received had she remained at Starbucks.”
“Further, given that there is no evidence of intentional discrimination, Starbucks requests that this Court award Ms. Phillips no wage loss damages,” the memo continued.
ABC News has reached out to Starbucks for comment on Wednesday’s ruling.
Robinson and Nelson reached a private settlement with Starbucks, as well as with the city of Philadelphia, which vowed in 2018 to pay the men each $1 and promised a $200,000 investment into programs that support aspiring young entrepreneurs, according to the Philadelphia Mayor’s Office.
(NEW YORK) — If you’re in the market to rent a new home, there’s a new warning by the Federal Trade Commission that you should be wary of before you go tour a property.
The agency says scammers are making fake rental ads by using the photos and electronic lockboxes of homes from other listings and pretending to be the owner.
“Scammers are stealing pictures of homes from other sites, houses that offer the post-COVID conveniences of self-guided tours where potential renter or buyer can quickly sign up for an account and unlock an electronic lockbox,” explains ABC News’ Trevor Ault. “The scammer pretends to be the owner and then asks for payment when a victim says they want to rent.”
Ault appeared on ABC’s Good Morning America Tuesday to detail more about the scam and share tips on how renters can avoid it:
