World Biz
Home Affordability Squeezed as Mortgage Rates Rise
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.
The United Kingdom finds itself ensnared in an inflation-driven cost-of-living crisis, a predicament that, according to a recent study in the open-access journal BMJ Public Health, could have dire consequences, including premature deaths and an alarming exacerbation of wealth-related health disparities.
The study, underpinned by meticulous modeling, presents a grim prognosis. It anticipates that the percentage of individuals meeting an untimely demise (before the age of 75) will surge by an unsettling 6.5% owing to the prolonged period of elevated price levels. What’s particularly disconcerting is the disproportionate impact on the most economically disadvantaged households. The research predicts that these vulnerable segments of society will witness a fourfold increase in mortality rates compared to their more affluent counterparts. This grim disparity is exacerbated by the fact that the less privileged must allocate a larger share of their income to grapple with soaring energy costs.
The study’s focus was on the impact of inflation on mortality rates in Scotland during the years 2022-3. It took into account scenarios with and without potential mitigating measures, such as government interventions aimed at alleviating household financial burdens.
Analyzing the collected data, the researchers constructed models to explore the potential ramifications on life expectancy and socioeconomic inequalities for the entire United Kingdom if varying degrees of mitigation were enacted. The unmitigated scenario paints a bleak picture, projecting a 5% increase in mortality rates in the least deprived areas and a staggering 23% surge in the most deprived areas. However, with the implementation of mitigation measures, these figures diminish to 2% and 8%, respectively, albeit still contributing to an overall increase of approximately 6.5% in mortality rates.
This grim outlook extends to overall life expectancy, which is expected to decline in all scenarios. The study underscores a crucial point: the economy’s performance directly impacts public health. It highlights the detrimental consequences of inflation and reductions in real-term income, underlining the stark disparities in how these challenges affect different segments of the population.
In a sobering conclusion, the researchers emphasize that public policy responses, as currently formulated, are insufficient to safeguard public health and prevent the deepening chasm of inequality. The situation remains grim, despite a slight unexpected slowdown in UK inflation to 6.7% in August, though it still maintains its position as the highest among G7 nations. This inflation surge is attributed to a combination of factors, including the enduring impact of coronavirus lockdowns, Brexit, and the ongoing conflict in Ukraine.
Amazon has announced a substantial investment of up to $4 billion in the artificial intelligence company Anthropic. This move signifies Amazon’s entry into the fiercely competitive AI arena, which has thus far been dominated by major players like Microsoft, Google, and OpenAI.
Amazon’s CEO, Andy Jassy, expressed admiration for Anthropic’s team and foundational AI models, emphasizing the potential to enhance various customer experiences in both the short and long term through deeper collaboration.
World Biz
Emirates and SriLankan Airlines Forge Interline Agreement for Seamless Travel Connectivity
Emirates and SriLankan Airlines have recently entered into a reciprocal interline agreement, aiming to enhance connectivity and convenience for passengers of both carriers. This strategic partnership facilitates seamless travel experiences, allowing passengers to access additional destinations on each other’s networks via Colombo and Dubai, all while utilizing a single ticket and enjoying the ease of baggage transfers.
For Emirates passengers, this interline collaboration provides access to a network of 15 regional destinations operated by SriLankan Airlines through Colombo. This expanded network includes new Indian destinations such as Madurai and Tiruchirapally, along with Gan Island in the Maldives. Furthermore, travelers can explore Far East and South Asian destinations, including Cochin, Chennai, Bangalore, Hyderabad, Malé, Bangkok, Kuala Lumpur, Singapore, Jakarta, Guangzhou, Seoul, and Tokyo, as detailed in a press release.
SriLankan Airlines’ customers will also reap the benefits of this partnership, gaining access to Emirates’ extensive global network. They can conveniently connect to 15 cities across the Middle East, Africa, Russia, and the United States, all operated by Emirates beyond Dubai. Notable destinations include Bahrain, Amman, Dammam, Medina, Cairo, Muscat, Nairobi, Moscow, Tel Aviv, as well as several key U.S. cities like New York JFK, Los Angeles, San Francisco, Chicago, Boston, and Houston.
Travelers can already book their itineraries through various channels, including emirates.com, srilankan.com, and preferred online and offline travel agencies. In addition, Emirates has expanded its service to Dhaka, now offering 21 weekly flights and convenient connections to nearly 140 destinations spanning six continents.
