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California Expands Down Payment Assistance Program with Changes to Ensure Equity: In an effort to promote equitable homeownership, California plans to allocate an additional $250 million in down payment assistance to first-time homebuyers this spring. The California Dream for All loan program, launched last year, experienced overwhelming demand, prompting adjustments for a more diverse reach. The program maintains its "shared appreciation" lending model, offering up to 20% of the purchase price or $150,000, repayable with a share of the home's appreciation upon resale. Notably, the California Housing Finance Agency aims to avoid a rush for loans by introducing a lottery system instead of the previous first-come, first-served approach. Homebuyers have until April to connect with state-approved lenders and initiate applications, with the lottery opening in early April and winners receiving vouchers to be used within 60 days. The extended preparation time aims to assist potential homeowners uncertain about buying without state aid. To address disparities, vouchers will be allocated regionally, and new eligibility criteria, including first-generation homebuyer status and lower income thresholds, aim to enhance inclusivity. As the program gears up for its second round, an outreach campaign starting in February will focus on informing potential homebuyers, especially in Southern California and the Central Coast, through various channels, emphasizing the program's accessibility and the possibility of homeownership in California. Interested applicants can visit the California Dream for All website or join CalHFA's homebuyer email list for updates.
US Consumer Sentiment Surges, Reflecting Confidence in Economic Outlook: The latest University of Michigan consumer sentiment survey reveals a remarkable 13% jump in January, reaching its highest level since July 2021 at 78.8. This surge, coupled with a 29% cumulative increase over the past two months, marks the largest such uptick since the US economy's rebound from the 1991 recession. Consumer confidence is bolstered by expectations of a "soft landing" in 2024, where inflation eases to the Fed's 2% target without a severe economic downturn. Positive economic indicators and robust income expectations contribute to this optimism, signaling a notable turnaround from the "vibe-cession" trend observed in 2023, where consumer sentiments didn't align with strong economic data.
Reddit's IPO Set for March: Anticipation Builds for Social Media's Big Debut: In a highly anticipated move, Reddit is gearing up for its initial public offering (IPO), scheduled for March, as reported by Reuters. The social media giant, valued at approximately $10 billion in 2021, plans to launch its IPO by the end of March following a public filing in late February. This marks a significant event as the first major social media IPO since Pinterest in 2019. Reddit's IPO will draw considerable attention, particularly from its own user base known for sparking meme stock rallies, exemplified by AMC and GameStop. With the company aiming to sell 10% of its shares, it enters the stock market competition against heavyweights like TikTok and Facebook in the quest for user engagement and advertising revenue. As the Reddit community eagerly awaits this milestone, all eyes are on how their influence might shape the company's market debut.
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The US banking system is about to get sped up like Barry Allen after the lightning struck, potentially eliminating those frustrating waiting days it can take for money to hit your account. The Fed is launching its FedNow instant payment service later this month. The new system will enable banks to send each other cash instantly, 24/7, as an alternative to the existing system that runs only during regular business hours and often takes days to move money. FedNow could put America’s banking system on track to catch up to countries like India and Nigeria, where high-speed payments are as common as high-speed rail in Japan. The US does already have an instant payments system, but it’s private rather than government-backed, and it hasn’t been widely adopted. It’s mostly only used by big banks, and only 1.4% of US transactions happen in real time, according to payment systems company ACI Worldwide.
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Elon Musk and other tech leaders signed an open letter calling on developers to “pause giant AI experiments.” The petition, which more than 1,000 AI experts have signed, warns that artificial intelligence poses “profound risks to society and humanity” and asks AI researchers to put their projects on ice for at least six months. OpenAI launched the latest version of its language model, GPT-4, this month; Google started rolling out its AI chatbot called Bard last week; and Microsoft added AI capabilities to its Bing search engine in February. Goldman Sachs even shared a report on Monday that said AI could boost worker productivity so much that annual world GDP would jump by 7%.
Los Angeles is days away from implementing a "mansion tax," which means sellers of luxury homes are scrambling to offload their properties. The measure was approved by voters in November, which adds a 4% tax on home sales between $5 million and $10 million, and adds a 5.5% tax on sales above $10 million, according to FOX 11. Funds collected from the tax will be used to build affordable housing for the homeless, according to city officials.
Buying a home in California is not an easy task, but a new state program launched Monday for first-time homebuyers aims to make the process a little easier. The California Dream For All program provides homebuyers with financial assistance equal to 20% of a home’s purchase price. Those funds can be used for a downpayment and closing costs when purchasing your first home. The program offers first-time homebuyers in California a shared appreciation loan of up to 20% of the cost of the home. If you’re buying a $500,000 home, you’d receive 20%, or $100,000, to help with a downpayment and closing costs. Once the homebuyer sells their home at a later date, they would be required to pay back the 20% assistance, plus 20% of the home’s appreciation. If your $500,000 home sells in five years for $700,000, you’d owe 20% of $200,000 appreciation — or $40,000 — in addition to the original loan. If you sell your home and it hasn’t grown in value, you’d only pay back the original 20% loan, according to the California Housing Finance Authority.
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Some real estate economists are projecting that mortgage rates will start to fall sometime in 2023, perhaps by the second half of the year. Lawrence Yun, the chief economist for the National Association of Realtors thinks mortgage rates already peaked in November and will hover around 6 percent, or edge lower, in 2023. “That could open the gates for buyers who are priced out to re-enter the market,” he said. (WSJ)
Southwest Airlines is attempting to resume its normal flying schedule today, planning to more than double its number of flights from Thursday’s level, after canceling nearly 16,000 flights over the previous week! (CNN)
Officials from the OC Health Care Agency are saying that people should stay out of the ocean in the OC & LA areas because of the high bacteria levels off local beaches. This is after a rainstorm that rolled on Tuesday. The advisory may be extended depending on further rainfall. (OC Register)