Morning Brew - ☕️ Real estate cool-off

The housing market might have peaked...
May 20, 2022 View Online | Sign Up | Shop

Morning Brew


Good morning. It’s the last Friday before the start of Summer Fridays, so today we’ll be holding the ceremonial sweatshirt-to-Hawaiian shirt swap at 3pm ET. Tune in on MB+.

Neal Freyman, Matty Merritt, Max Knoblauch














*Stock data as of market close, cryptocurrency data as of 12:00am ET. Here's what these numbers mean.

  • Markets: The one refrain you hear on Wall Street these days? “There’s nowhere to hide.” As inflation crimps profits and the Fed tightens the monetary screws, stocks continued their slide with no bottom in sight. A number of American corporate giants, including Walmart, Target, Bank of America, Charles Schwab, and Intel, hit 52-week lows yesterday.


The housing market is finally chilling out

Retired Garfield Garfield and Friends/Paws, Inc. via Giphy

You know that blissful feeling when you first step out of a sauna into room temperature? The housing market might be experiencing that right now. More signs are suggesting that the sizzling pace of US home price increases will start to ease.

The first sign: Sales of existing homes fell 2.4% in April to their lowest level in almost two years. It’s the third straight month they’ve declined, showing how record prices and skyrocketing mortgage rates have made potential homebuyers close their Zillow tabs in frustration.

“It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years,” Lawrence Yun, the chief economist at the National Association of Realtors, said.

That surge isn’t over…yet. The median price of an existing home jumped to an all-time high of $391,200 in April, an increase of 14.8% from a year earlier. And an average home on the market stayed there for just 17 days before going under contract.

But relief is on its way

The Atlantic’s Derek Thompson identified several clues that the housing market has indeed peaked:

  • The home inventory shortage, a leading contributor to the demand​​–supply imbalance, is starting to ease in the hottest markets, such as California and Colorado.
  • Google searches for “homes for sale” were down by double-digits in major cities such as LA, Boston, and SF in mid-March, according to Redfin.
  • Redfin agents also reported that they were getting fewer calls from potential buyers in major cities, and agents in California said the number of showings and offers had dropped off.

Bottom line: If “housing market downturn” gives you nightmares about the 2008 financial crisis, experts say this cooling-off period will be more ceiling fan than polar plunge. While the 2000s bubble was fueled by cheap credit, lax regulation, and rotten subprime mortgages, the boom over the last two years can be best explained by a sudden uptick in demand outpacing available supply.—NF



In honor of International HR Day


Real talk: The last two years and change have been indescribably difficult for us all. This is especially true for the many HR professionals around the country who have navigated the transition to remote work, staffing shortages, and workplace equity initiatives.

We don’t often share gratitude for all the essential (and challenging) work that you do. So, in partnership with BambooHR, we’d like to take a moment on International HR Day to recognize and appreciate your hard work.

In between the nonstop pings and crafting internal communications, we hope you’re able to take care of you. Just like you always take care of us. Check out BambooHR on Twitter to join the conversation (and maybe win a prize!).


Tour de headlines

A United Launch Alliance Atlas V rocket with Boeings CST-100 Starliner spacecraft onboard NASA/Joel Kowsky

Third time’s the charm for Boeing. The aerospace company successfully sent its Starliner capsule on its way to the International Space Station after two failed (and costly) attempts in 2019 and 2021. Eventually, Starliner will act as a space taxi to shuttle astronauts between Earth and the space station. No human crew members were on board, but one seat was occupied by a mannequin named Rosie the Rocketeer.

Oklahoma passes toughest abortion law in the US. The state’s legislature approved a bill that bans abortions beginning at fertilization, with exceptions if the pregnancy is the result of rape or incest. The bill, which is expected to be signed by Republican Gov. Kevin Stitt, empowers private citizens to sue anyone who performs or aids an abortion for damages of $10,000 minimum.

Elon Musk accused of sexual misconduct. A SpaceX flight attendant alleged that Musk, the CEO, exposed himself to her, touched her without consent, and offered to buy her a horse in exchange for an erotic massage, according to documents seen by Insider. SpaceX reportedly paid her $250,000 to settle sexual misconduct claims in 2018, two years after the alleged incident occurred. In response, Musk called the story a “politically motivated hit piece.”


Hot monkeypox summer

Microscope with question marks around it and a monkeypox virus far away from it. Francis Scialabba

Massachusetts health officials said Wednesday that they detected the first US case of monkeypox this year, and NYC officials are investigating another possible case. At least 67 other suspected cases of the rare virus have also recently popped up in countries like the UK, Portugal, and Canada, baffling experts who have yet to uncover how the virus managed to make giant continental jumps.

What is monkeypox? It’s a virus that can spread through respiratory droplets and bodily fluids. And in terms of symptoms, it’s a whole gaggle of things you don’t want: fever, aches, swollen lymph nodes, and (the crème de la crème) painful blisters on the hands, feet, and face. Most of the cases in the current outbreak have been confirmed to be from a mild strain that has a 1% fatality rate.

Most people catch monkeypox directly from animals (though first found in monkeys, it’s usually spread by rodents) in West Africa or central Africa, and it’s pretty rare to contract it from another person. But a majority of the current cases were found in people who haven’t recently traveled to those regions, meaning they might have caught it via community transmission.

Should we be worried? Health experts say not right now. Monkeypox is pretty easy to spot and track because of the sores, and it’s similar enough to smallpox that the vaccines for that disease would likely offer protection.—MM



What labor shortage?

Amazon workers in a fulfillment center CHRIS J RATCLIFFE/AFP via Getty Images

After over a year of reports about companies struggling to find employees, Walmart and Amazon, America’s two largest retailers, have a problem you probably weren’t expecting: They have too many workers. It’s a pivot faster than the four days between “Dad doesn’t want a dog” and “Dad purchased a $400 thunder vest for Gwenny.”

In its earnings call this week, Walmart CEO Doug McMillon said that due to a late 2021 hiring surge to cover Omicron-related staffing shortages, the company experienced weeks of overstaffing in the first quarter of this year. Along with higher fuel prices and an inventory glut, elevated labor costs led to a 24.8% profit decline from last year.

Amazon also reported earlier this month that employees returning from sick leave resulted in a quick transition from being understaffed to overstaffed. The company, which hired 270,000 workers in the second half of 2021, is unlikely to resort to layoffs due to its more than 100% turnover rate.

Zoom out: Big Retail isn’t the only industry deleting old tweets about how “nobody wants to work anymore.” In tech, Meta announced a hiring freeze across some departments, while Uber told employees it would be “deliberate” about adding to headcount. Robinhood, Peloton, Cameo, and Netflix have all announced layoffs.—MK



Key performance indicators

Burrito with edible tape Johns Hopkins University

Stat: How do you put a number on the amount of beans lost to loosely wrapped burritos? You just can’t. But engineering students at Johns Hopkins University have developed an edible tape that may solve the problem of tenuous tortillas forever. Dubbed Tastee Tape, the water-activated adhesive is naturally clear, but dyes can give it a more fun vibe. The students are attempting to patent the product, and we wish them all the best.

Quote: “The result is an absence of checks and balances in Russia, and the decision of one man to launch a wholly unjustified and brutal invasion of Iraq—I mean of Ukraine.”

Former President George W. Bush mixed up his invaded countries when criticizing Russian President Vladimir Putin in a speech Wednesday. After he realized the slip-up, he said, “Iraq too. Anyway…I’m 75,” to laughter from the audience.

Read: Who owns Einstein? The battle for the world’s most famous face. (The Guardian)


Bring your quiz to work day

Weekly news quiz

Getting a 5/5 on the Brew’s Weekly News Quiz has been compared to realizing that MDW is just one week away.

It’s that satisfying. Ace the quiz.


The Texas Switch: It’s one of the coolest movie stunts you never knew existed.

Only in your state: Find out which gems are hidden in your backyard.

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  • The Senate approved a $40 billion military and aid package for Ukraine. Once it’s signed by President Biden, it will bring the US’ total financial commitment to Ukraine to nearly $54 billion.
  • FTX, the crypto exchange that’s parterned with every celebrity you know, is getting into stock trading in the US.
  • Twitter released a new policy that will crack down on misinformation during international armed conflicts or crises, such as the war in Ukraine.
  • Apple unveiled its mixed-reality headset to its board, indicating that it could be ready for showtime soon, according to Bloomberg.
  • McDonald’s found a buyer for its Russian business: existing company licensee Alexander Govor. He plans to operate Russia’s 850 locations under a new name, McDonald’s said.


So...crypto-backed mortgages are a thing

Crypto crash course Mark Wang

As part of our Crypto Crash Course, we looked at the startups that are offering crypto-backed mortgages, meaning they allow customers to take out mortgages by putting up cryptocurrency as collateral.

Is it a sign of innovation in the mortgage market or a housing bubble? Read more here.

And while you’re at it, check out all of the stories in this crypto series.

This editorial content is supported by eToro.


Friday puzzle

We haven’t done a riddle-style teaser in a while, so here goes one:

Two objects perform the same task. One has thousands of moving parts while the other has no moving parts. What are they?


Share Morning Brew with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag.

We’re saying we’ll give you free stuff and more friends if you share a link. One link.

Your referral count: 2

Click to Share

Or copy & paste your referral link to others:


The sundial and the hourglass.


Written by Neal Freyman, Max Knoblauch, and Matty Merritt

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