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The Federal Housing Administration is relaxing the way it assesses student-loan debt when weighing eligibility for homebuying assistance as the Biden administration pushes to help lower-income borrowers and narrow a racial gap in homeownership, the Wall Street Journal reported. The changes, which were presented in a letter to lenders late Thursday, are intended to allow more borrowers to qualify for loans backed by the FHA, a unit of the Department of Housing and Urban Development that provides insurance on mortgages to first-time and lower-income home buyers. Prospective home buyers who qualify for FHA help typically have lower credit scores than individuals with other government-backed loans — such as those guaranteed by Fannie Mae and Freddie Mac — and they are disproportionately Black and Hispanic, according to data collected by federal regulators. The surge in student debt over the past two decades has coincided with historically low homeownership rates among younger households. Some researchers say the phenomena are linked. Relaxing the way it factors in student debt will bring the FHA more in line with other government-backed mortgage programs, such as Fannie and Freddie, which also eased their criteria in recent years. The Biden administration is proposing more down-payment assistance for Black homeownership and taking a number of other measures to fulfill a pledge to address racial equity in housing.

A bipartisan senators’ group working on a $1 trillion infrastructure compromise more than doubled in size to 21 members on Wednesday, a key threshold that gives momentum to their effort as President Joe Biden returns from overseas at a pivotal time for his big legislative priority, the Associated Press reported. Biden told reporters he had yet to see the emerging proposal from the group but remained hopeful a bipartisan agreement could be reached, despite weeks of on-again, off-again talks over his more robust $1.7 billion American Jobs Plan. “I’m still hoping we can put together the two bookends here,” Biden said as he prepared to depart Geneva after attending a summit of European leaders. The administration dispatched top White House advisers for back-to-back meetings on Capitol Hill while the president was away. Biden and his Democratic allies in Congress are proceeding on a two-track strategy — seeking a bipartisan bill while preparing to go it alone if Republicans try to block the investments with a filibuster in the Senate. The administration officials huddled late Wednesday in the Capitol basement with the Democratic senators in the bipartisan group, grinding through details of the proposal. On Tuesday, the White House team shored up restless House Democrats eager for momentum on a shared domestic priority with the president.

A bipartisan senators’ group working on a $1 trillion infrastructure compromise more than doubled in size to 21 members on Wednesday, a key threshold that gives momentum to their effort as President Joe Biden returns from overseas at a pivotal time for his big legislative priority, the Associated Press reported. Biden told reporters he had yet to see the emerging proposal from the group but remained hopeful a bipartisan agreement could be reached, despite weeks of on-again, off-again talks over his more robust $1.7 billion American Jobs Plan. “I’m still hoping we can put together the two bookends here,” Biden said as he prepared to depart Geneva after attending a summit of European leaders. The administration dispatched top White House advisers for back-to-back meetings on Capitol Hill while the president was away. Biden and his Democratic allies in Congress are proceeding on a two-track strategy — seeking a bipartisan bill while preparing to go it alone if Republicans try to block the investments with a filibuster in the Senate. The administration officials huddled late Wednesday in the Capitol basement with the Democratic senators in the bipartisan group, grinding through details of the proposal. On Tuesday, the White House team shored up restless House Democrats eager for momentum on a shared domestic priority with the president.

More than 4 million people say they fear being evicted or foreclosed upon in the coming months, just as two studies released Wednesday found that the nation’s housing availability and affordability crisis is expected to worsen significantly following the pandemic, the Associated Press reported. The studies come as a federal eviction moratorium is set to expire at the end of the month. The moratorium has kept many tenants owing back rent housed. Making matters worse, the tens of billions of dollars in federal emergency rental assistance that was supposed to solve the problem has not reached most tenants. The housing crisis, the studies found, risks widening the gap between Black, Latino and white households, as well as putting homeownership out of the reach of lower-income Americans. The reports were released on the same day as Census Bureau’s biweekly Household Pulse Survey came out. It showed that nearly 4.2 million people nationwide report that it is likely or somewhat likely that they will be evicted or foreclosed upon in the next two months. Many of those tenants are waiting to see what becomes of the Centers for Disease Control and Prevention eviction moratorium, which is set expire June 30. Housing advocates are pressuring President Joe Biden’s administration to extend it. They argue extending it would give states the time to distribute more than $45 billion in rental assistance and protect vulnerable communities from COVID-19. The rental assistance has been slow to reach tenants.

The Federal Reserve signaled yesterday that it may act sooner than previously planned to start dialing back the low-interest-rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation, the Associated Press reported. The Fed’s policymakers forecast that they would raise their benchmark short-term rate — which affects many consumer and business loans, including mortgages and credit cards — twice by late 2023. They had previously estimated that no rate hike would occur before 2024. At a news conference, Chair Jerome Powell said the Fed’s policymaking committee also began discussing when to reduce its monthly bond purchases. But Powell made clear that the Fed has yet to decide when it will do so. The purchases, which consist of $120 billion in Treasury and mortgage bonds, are intended to keep longer-term rates low to encourage borrowing. The Fed has made clear that its first step in slowing its support for the economy will be to pare its bond purchases — and that it would begin to raise rates only sometime after that. Its key rate has been pinned near zero since March 2020. The central bank’s new forecast for rate hikes starting in 2023 reflects an economy that’s achieving faster progress than was expected earlier this year. At the same time, Powell sought Wednesday to dispel any concerns that the Fed might be in a hurry to withdraw its economic support by making borrowing more expensive. The economy, he said, still hasn’t improved enough to reduce the pace of the monthly bond purchases, which the Fed has said it intends to continue until “substantial further progress” has been made toward its employment and inflation goals.

Retail sales fell in May, dragged down by a decline in auto sales and a shift by Americans to spend more on vacations and other services instead of goods, the Associated Press reported. Total sales dropped a seasonally adjusted 1.3% in May from the month before, the U.S. Commerce Department said yesterday. Wall Street analysts expected a smaller decline of 0.5%. Economists predicted retail sales to drop in May because of the lack of cars available for sale due to a worldwide shortage of chips, which are needed to power in-car screens and other features. Sales at auto dealerships fell 3.7% last month, the government said. Another reason for the decrease: As more Americans are vaccinated and want to head out more, they are spending more of their money on haircuts, trips and other services that are not included in Tuesday’s report. Last month, sales fell at furniture, electronics and home building stores. “Consumer spending growth through the rest of the year will shift to services from goods,” wrote PNC chief economist Gus Faucher in a research note. That switch will also likely help reduce the supply shortages that have plagued some parts of the economy and pushed up inflation. There are signs this is already happening: With car prices rising, auto sales have slowed. Vehicle sales soared in the pandemic, which means fewer people need new cars. And according to a separate government report Tuesday, automakers ramped up production in May, after it fell in two of the previous three months. Read more. 

In related news, wholesale prices, driven by rising food costs, increased 0.8% in May and by an unprecedented amount over the past year as the U.S. economy emerges from pandemic lockdowns and pushes inflation higher, the Associated Press reported. The monthly gain in the producer price index, which measures inflation pressure before it reaches consumers, followed a 0.6% increase in April and a 1% jump in March, the Labor Department reported yesterday. Food prices jumped a sizable 2.6% with the cost of beef and veal rising, though the cost of fresh fruits declined. Energy costs rose 2.2%, reversing a 2.4% drop in April. Over the past 12 months, wholesale prices are up 6.6%, the largest 12-month increase on records going back to 2010. Read more. 

Neiman Marcus is hoping to capitalize on rebounding luxury sales by investing more than $500 million over the next three years in refreshing stores, speeding up deliveries and acquiring new technology, the Associated Press reported. The plan, unveiled yesterday, includes a pact to purchase Stylyze Inc., a tech startup that recommends outfits for customers based on past purchases and browsing history. Neiman Marcus has been working with the company since 2018 and decided to buy it outright because of its potential, according to the luxury retailer’s CEO, Geoffroy van Raemdonck. He says the machine learning technology has helped convert online browsers into buyers and enticed shoppers to keep coming back. Financial terms were not disclosed. Neiman Marcus emerged from chapter 11 protection last September, one of the most high-profile retail bankruptcies at the onset of the pandemic. Like many of its peers, the privately held department store chain was forced to temporarily close its stores for several months. However, the reorganization in bankruptcy court helped reduced its debt to $1.1 billion as of April, down from $5.1 billion a year ago. And Neiman Marcus currently has available liquidity of more than $850 million versus $132 million a year ago.