A weekend topic starting with Yahoo Finance. "Homebuyers in some cities have no choice but to buy million-dollar homes as prices near all-time highs. A report from LendingTree found that two California cities have larger shares of million-dollar homes than properties under that mark. The percentage of homes over $1 million was 66.28% in San Jose and 52.91% in San Francisco. Los Angeles followed at 26.48%, San Diego at 23.15%, and Seattle at 18.70%. There are 1,230 homes for sale in San Diego, but just 529 units are listed at $1 million and under as of Wednesday this week. Of these, only 114 properties have three or more bedrooms and only 63 units are single-family homes. 'There are a lot of areas, especially really expensive areas, at this point where million-dollar homes have not only become more common, they've also — for lack of a better term — become more middle class,' said Jacob Channel, LendingTree's senior economist. "[These homes] are not huge, only a few bedrooms, modest amenities.'"

KTVU in California. "With mortgage rates at a 20-year-high, home values have sunk with fewer ready buyers. 'We've seen a decrease in prices of 20 to 30% in the last 16 months of probably 10 to 20% depending on the neighborhood,' said Jeff Mann, a long-time broker and realtor in Antioch. 'It's uncommon to have multiple bids. Most properties are available. A buyer can come in and purchase a home without competition.'"

From WFLX. "You’ve likely heard about the migration to Florida from places like New York and California. But what about the Florida residents leaving and moving to places like Georgia and the Carolinas? Leanne McClaren said it was time to leave Florida, departing the Sunshine State for South Carolina after her husband received a job offer. She was in search of a more comfortable life than what Florida was providing. 'It was a very hard decision,' she said. 'It's definitely a lot more affordable there. … That was the main reason, the expenses.' In a twist of events, it turns out there is no place like home for the McClarens. She's heading back to Florida. 'I really would say to really really think about it before you do it,' McClaren said. 'Because I kind of did it on a whim. Because ultimately, at this point in time, buying my house back would be double.'"

Yahoo Finance. "Mortgage rates haven’t been this high for over two decades, but it’s far worse to be a homebuyer now than then. Add in high inflation and decades of stagnant wage growth, and buyers now have less purchasing power than twenty-some years ago. Today’s homebuyers couldn’t have a more different experience, with the Fed raising its benchmark rate rapidly over the past 18 months. Mortgage rates followed, but only after buyers witnessed them plunging under 3% for more than a year during the pandemic, setting off a frenzy among buyers and a refinance boom among homeowners."

"'It all comes from how homebuyers – and correspondingly home prices – behave in a falling interest rate environment like the one we’ve broadly been in for the past 40 years,' said Andy Walden, vice president of strategy at Black Knight. From 1975 to 2000, the median home price was on average 3.6 times the median household income. Today, that figure has jumped to 5.9 times the median income – slightly lower than the six times reached last summer before prices began to correct, Walden said."

"'The last time interest rates were at this level, home prices, which are up 160% over that span, have risen at twice the pace of incomes, which are up only 80% over that period,' Walden said. 'That all works fine until interest rates push sharply higher, which means that you’re no longer able to leverage those same income dollars to the degree you were in recent years.'"

From Bloomberg. "Oaktree Capital Management co-founder Howard Marks said he expects more companies to default on their debt as higher interest rates make it harder for struggling companies to raise capital. 'When you go through a period when it’s super easy to raise money for any purpose or no purpose, and you go into a period when it’s difficult to raise money, even for a good purpose, clearly many more companies are going to founder,' Marks said."

The Telegraph. "A 'wave of bankruptcies' threatens the eurozone economy as companies used to ultra-low borrowing costs are hit by rising interest rates, the OECD has warned. More companies are already failing because of high levels of debt and the withdrawal of pandemic-era support, with businesses in Spain proving particularly vulnerable. 'Looking at the historical record, there seems to be no post-1950 precedent for a sizeable disinflation induced by the central bank in the US, Canada, Germany or the UK that does not entail substantial economic sacrifice or a recession,' the OECD said."

From Burnaby Now. "It can be tempting to follow American policy discussions and presume that Canada and B.C. are similarly challenged by rising income inequality. However, the data does not support that assessment. Canada is not like the United States when it comes to the distribution of household incomes. It is right to be concerned about wealth inequality, too. However, since real estate makes up most of households’ non-pension assets, concerns about wealth inequality mostly relate to developments in established dwelling prices and housing markets, not wages and labour markets. A country cannot redistribute income that it does not generate."

"The OECD projects that Canada – and by extension B.C. – will be the worst performing economy out of 38 advanced countries over 2020-60, with the lowest rate of per capita economic growth. The principal reason is that Canada is expected to rank 7th last and dead last for productivity growth over 2020-30 and 2030-60, respectively. Consequently, young and aspirational Canadians face 40 years of stagnation in average real incomes."

"Canada and B.C. are on track to meet these dismal projections. Canada’s recovery from the pandemic downturn was the 5th weakest of any advanced country, and we are one of only seven OECD countries that has still not recovered its pre-pandemic level of real GDP per capita. Projections based on the federal budget indicate Canada will not recover its 2019 level of GDP per capita until at least 2027. B.C.’s GDP per capita has recovered its 2019 level, but provincial budget forecasts show it falling over the next five years, meaning it will be lower in 2027 than in 2022."

"To put it plainly, Canada and B.C. are good at sharing prosperity – our challenge is our inability to generate prosperity in the first place. This is where our political class in Ottawa and Victoria must turn their attention."

Business Insider. "China's economic troubles are the result of a debt bubble that began in 2008 – and the money used to prop up growth in the country over the past decade is now finally coming back to bite, according to top economist Kenneth Rogoff. The Harvard professor pointed to a 'debt supercycle' that started in the US during the financial crisis, spread to Europe in 2010, and has since reached the world's less prosperous economies. 'China's current problems can be traced back to its massive post-2008 investment stimulus, a significant portion of which fueled the real-estate construction boom,' Rogoff said. 'After years of building housing and offices at breakneck speed, the bloated property sector – which accounts for 23% of the country's GDP (26% counting imports) – is now yielding diminishing returns.'"

"Though China's housing supply and infrastructure are similar to that of other advanced economies, its per capita income remains relatively low, Rogoff said, just one of the factors that has shaken confidence in the sector. 'The debt supercycle may have lasted longer than initially expected, perhaps because of the pandemic. But it was a critical piece of the story, and now, as China's economy falters, it is the best explanation for what might come next,' he later added."

From Reuters. "In the beginning, Hui Ka Yan followed a simple formula. Borrow to buy land. Sell homes on the site before they are built. Use the cash to pay lenders and finance the next real estate project. For two decades, starting in the mid-1990s, this approach was enormously lucrative as Chinese home prices soared. It transformed Mr. Hui, a former steel-industry employee from a rural village, into China’s richest man. And it turned his company, China Evergrande Group, into a vast real estate empire. But as Evergrande grew increasingly laden with debt, the company resorted to ever more unorthodox strategies to generate funds."

"Companies accounting for 40 per cent of Chinese home sales have defaulted since mid-2021, according to analyst estimates. Homes have been left unfinished. Suppliers haven’t been paid. And some of the millions of Chinese people who put their savings in property-linked wealth-management products face the prospect of not getting their money back."

"Evergrande’s properties were 'sold as a speculative investment, not sold as a place to live,' said Anne Stevenson-Yang, managing principal at J Capital Research in the United States. People purchase them because they think the value will appreciate 'so obviously the confidence game will only work as long as people keep buying.'"

From ABC News. "If it feels like we're in uncharted territory when it comes to keeping a roof over your head, you're right. Housing costs are the highest on record, and a closer look reveals who is being hit hard and who is unscathed. Associate professor Emma Power from Western Sydney University says the growing number of older Australians renting is a sign the housing system is no longer working as it used to."

"'Home ownership has been seen as a pillar of our welfare system. The age pension calculations assume home ownership, and it's supported in all sorts of ways — negative gearing, capital gains, tax discounts. So there's all of these systems through many different types of policies that supported home ownership, because it was seen as being a welfare good,' she said. 'The house was always assumed to be this asset that people could draw on when they needed that wealth. But as that starts to crumble and fall apart, the things that it was propping up for individuals start to become social costs.'"

The Miami Herald. "Inflation needs to decline further before the Federal Reserve considers ending its more than yearlong string of quarterly interest-rate hikes meant to slow breakneck economic growth, the Federal Reserve Bank of Atlanta chief executive told a student gathering this week at Broward College. Although he acknowledged consumer price increases have slowed to less than half of their 9.1% peak in June 2022, Raphael Bostic, CEO and president of the Fed’s Atlanta bank, said U.S. inflation remains more than double the Fed’s target of 2%. 'That’s a problem,' he said."

"Bostic said he’s been having conversations with lower-income communities in South Florida, as part of a series in which Fed officials visit local residents. He’s asked them what hurts them more: inflation or higher interest rates? 'The uniform answer, which surprised me, was inflation,' he told the group at Broward College."