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Home Affordability Squeezed as Mortgage Rates Rise

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Mortgage United States

Mortgage rates in the United States have surged to their highest point since 2002, according to a report from a prominent home loan finance company on Thursday (August 17). This development adds further strain to buyers already grappling with the challenge of elevated costs and limited housing inventory. The well-liked 30-year fixed-rate mortgage has now reached 7.09 percent this week, a figure stated by Freddie Mac in an official statement. This rate last exceeded the seven percent threshold back in November 2022.

The housing market has been significantly impacted by the rapid escalation of interest rates in recent months, causing homeowners to hesitate putting their properties up for sale. Many had secured lower rates on their mortgages previously. Economist Oren Klachkin from Oxford Economics emphasized that the current rate hike will exacerbate the difficulties potential homebuyers face in affording new homes. He stated that affordability is rapidly diminishing due to the combination of high rates and tightened credit flow, leading to an acute scarcity of available properties.

Comparatively, a year ago, the 30-year rate stood at 5.13 percent, while it was below three percent in late 2020. This new figure of 7.09 percent is the highest recorded since April 2002, based on data from Freddie Mac. Klachkin highlighted that the escalating rates discourage homeowners from listing their properties, as it would necessitate moving from a mortgage with an interest rate below four percent to a new one. This transition could potentially double monthly payments if rates were to reach eight percent.

June witnessed a notable decline in sales of existing homes, dropping to the slowest pace since January. Simultaneously, the median sales price reached the second-highest level on record, as indicated by data from the National Association of Realtors (NAR). The NAR further noted that a substantial third of homes were sold above their list prices during that month. The scarcity of existing homes available for purchase has compelled buyers to enter the market for new properties, further intensifying the demand-supply imbalance.

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Fire in Mangaf Workers’ Accommodation Claims 41 Lives

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A devastating fire broke out early Wednesday in a building housing workers in Mangaf, southern Kuwait, resulting in the deaths of at least 41 people, according to Deputy Prime Minister Sheikh Fahad Yusuf Saud Al-Sabah.

During his visit to the site, Sheikh Fahad, who also oversees the interior and defense ministries, criticized real estate owners for their violations and greed, attributing these factors to the tragic incident.

“Unfortunately, the greed of real estate owners is what leads to these matters,” Sheikh Fahad stated.

The blaze was reported to authorities at 6:00 a.m. local time (0300 GMT), according to Major General Eid Rashed Hamad.

“The building was used to house a large number of workers. Dozens were rescued, but sadly, many succumbed to smoke inhalation,” a senior police commander informed state television.

He further emphasized the longstanding warnings against overcrowding in worker accommodations, though he did not specify the workers’ occupations or nationalities.

The fire has been contained, and authorities are currently investigating its cause, officials said.

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Baltimore shipping lane fully reopens after bridge collapse

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The Baltimore shipping lane blocked for more than two months after a cargo ship collided with a major bridge in
March, sending it crashing into the water, fully reopened on Monday, authorities said.

The US Army Corps of Engineers, along with Navy salvage divers, restored the channel to its original dimensions by removing about 50,000 tons of debris from the Patapsco River, a statement from the Key Bridge Response Unified Command said.

The riverbed was certified as safe for transit on Monday.

“We are proud of the unified efforts that fully reopened the Federal Channel to port operations,” said Lieutenant General Scott Spellmon, commanding general of the Army Corps of Engineers.

“The partnerships that endured through this response made this pivotal mission successful.”

On March 26, the Singapore-flagged M/V Dali lost power and plowed into a support column of the Francis Scott Key Bridge, causing it to collapse and killing six road workers who had been filling potholes overnight.

The 106,000-ton ship had been headed for Sri Lanka at the time of the accident.

The US National Transportation Safety Board (NTSB), which is investigating the incident along with the FBI, has said the ship had two electricity blackouts in the moments before the disaster.

The Dali was refloated last month and towed back into port.

The port of Baltimore is one of America’s busiest ports and a key hub for the auto industry, handling almost 850,000 autos and light trucks last year — more than any other US port, according to state figures.

The full reopening of the shipping channel will allow for two-way traffic, Monday’s statement said.

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PM Sheikh Hasina and Modi Exchange Pleasantries at Swearing-In

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Prime Minister Sheikh Hasina of Bangladesh and her Indian counterpart, Narendra Modi, exchanged pleasantries following Modi’s swearing-in ceremony this evening.

Foreign leaders, including the Bangladeshi Prime Minister, took turns approaching the podium to congratulate Modi on taking his oath as the Indian Premier for a third consecutive term.

Clad in light purple, Prime Minister Sheikh Hasina stepped forward to greet Modi, who extended his hand to her. They exchanged a warm handshake and brief pleasantries, inquiring about each other’s well-being.

Modi then escorted Prime Minister Hasina to the banquet hall, guiding her to the dinner hosted by President Smt. Droupadi Murmu at Rashtrapati Bhavan.

Prime Minister Hasina, accompanied by her daughter Saima Wazed, entered the Rashtrapati Bhavan as the third foreign leader to attend the oath-taking ceremony.

Top leaders from Sri Lanka, the Maldives, Bhutan, Nepal, Mauritius, and Seychelles were also present at the swearing-in event, which saw a record attendance of over 8,000 dignitaries.

Prime Minister Hasina arrived in New Delhi on Saturday to participate in the ceremony. She is scheduled to depart for Dhaka tomorrow afternoon.

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