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New U.S. home construction declined in September and permit applications for single-family dwellings fell, adding to evidence that the highest mortgage rates in two decades are sapping demand and discouraging new builds, Bloomberg News reported. Residential starts decreased 8.1% last month to a 1.44 million annualized rate, according to government data released Wednesday. Single-family homebuilding dropped to an annualized 892,000 rate, the slowest since May 2020. Construction of multifamily dwellings also declined. Applications to build, a proxy for future construction, rose to an annualized 1.56 million units, led by multifamily properties. Permits for construction of one-family homes fell 3.1% to a more than two-year low of 872,000 in September. The housing market is bearing the brunt of the Federal Reserve’s interest-rate hikes as they aim to free the economy of stubborn inflation. The real estate sector is especially susceptible to rising borrowing costs, and the Fed is projected to push ahead with another 75 basis-point increase in early November.

Mortgage rates reached a 20-year high last week as the U.S. housing market continued its rapid slowdown, according to data released today by the Mortgage Bankers Association (MBA), The Hill reported. The 30-year fixed rate climbed to 6.94 percent in the second week of October, up from 6.81 percent a week earlier, marking the highest 30-year rate since 2002. MBA’s Weekly Mortgage Applications Survey showed an overall decrease in mortgage applications, including a dropoff in refinancing. The share of refinance applications fell to 28.3 percent of total applications. “The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. Meanwhile, the share of adjustable-rate mortgage (ARM) applications reached the highest level since 2008, rising to 12.8 percent of mortgage applications.

The Attorney General’s Office is asking a federal judge to overturn a bankruptcy court ruling that some legal experts say could harm New Hampshire homeowners who fall into debt, the New Hampshire Union Leader reported. New Hampshire state law establishes a “homestead right,” stating: “Every person is entitled to $120,000 worth of his or her homestead, or of his or her interest therein, as a homestead.” Bankruptcy attorneys say that protection typically has been doubled for married couples, to $240,000. However, in June, the chief judge in U.S. Bankruptcy Court, Bruce Harwood, ruled that the husband of a Merrimack woman seeking bankruptcy protection was not entitled to a homestead exemption because he is not on the deed to the family’s home. The bankruptcy trustee had objected to the homeowner’s claim of a second homestead exemption for her husband, and Harwood agreed. “Because the Debtor’s spouse is not an owner of the property, he is not entitled to claim an exemption,” he wrote in his opinion. “The couple is not allowed to ‘double-dip’ and claim $240,000 as exempt,” he wrote. Nashua attorney Leonard Deming, who represents the homeowner, has appealed that decision to the U.S. District Court in Concord.

Housing costs shifted into overdrive last month and risk becoming an enduring source of U.S. inflation, Bloomberg News reported. Rent of shelter and owners’ equivalent rent each accelerated 0.8% in September from the prior month, the most since 1990. according to Labor Department data released Thursday. Both measures posted record 6.7% advances on an annual basis. That contributed to the biggest year-over-year increase in overall shelter costs, which also includes hotel stays and tenants’ and household insurance, since 1982. Housing makes up about a third of the overall basket of consumer prices, which rose last month by more than forecast. It comprises an even larger share of the so-called core CPI, which also exceeded estimates. The report cited shelter, along with food and medical care, as being among the largest of “many contributors” to the broad advance in September.

The only mall in this former manufacturing town recently sold for a fraction of its value only a decade earlier, another sign that regional malls are sitting out a broader recovery in retail real estate, the Wall Street Journal reported. The previous owner of Emerald Square Mall, which spans 1 million square feet and features stores such as Victoria’s Secret and Macy’s, defaulted on $94.5 million of debt in mid-2020. That marked the largest loss recorded on a loan securitized in the last dozen years, according to Moody’s Investors Service. Kohan Retail Investment Group, a shopping-mall investment company that owns more than five dozen malls across the U.S., recently acquired Emerald Square for $29 million. The property was valued at $167 million in 2012, according to real-estate data provider Trepp. Once a bustling shopping hub, the three-level Emerald Square Mall is now about 65% occupied, with long stretches of vacant storefronts. Sears, which had operated as one of the mall’s anchors for more than three decades, closed last year, and its space remains empty. After grappling for years with the fallout from overbuilding and online shopping, U.S. retail real estate overall is emerging from the COVID-19 pandemic in a surprisingly strong position. But certain areas remain acutely challenged, particularly older, low-end malls. The total number of U.S. malls has declined from an estimated 2,500 in the 1980s to about 700 today, according to Nick Egelanian, president of retail advisory firm SiteWorks, which tracks U.S. mall performance. Many were turned into open-air retail, an expensive and difficult undertaking that often takes decades. Some were demolished. Others remain standing, but aren’t operating and stand as vacant “ghost towns.”

An affiliate of Byndfit, a planned Washington, D.C., fitness center that said it would "revolutionize" the industry, has filed for chapter 11 bankruptcy amid a lawsuit filed by its Chinatown landlord that seeks to evict the tenant from the building and collect millions in what it alleges is unpaid rent, the Washington Business Journal reported. BF Chinatown LLC, a Byndfit affiliate created to operate a location on the ground floor of Terrell Place, an office building at 650 F St. NW across from Capital One Arena, filed for bankruptcy protection Aug. 30 in the U.S. Bankruptcy Court in Alexandria, per court documents. It filed just before midnight Aug. 31, when D.C. Superior Court was scheduled to hold a hearing related to its landlord’s motion for damages and to reclaim the space, court documents show. That location was to be launched in early 2020 as the first of several from the company and its co-founders, including Ryan Macaulay and Raymond Rahbar, according to a countercomplaint that BF Chinatown filed hours before it filed for bankruptcy protection. That plan hit delays due to the pandemic, per media reports. Today, the building owner, an affiliate of Beacon Capital Partners called Terrell Place Property LLC, claims it's owed more than $4 million in rent, related fees and other holdover costs, according to its Aug. 22 court filing. A Superior Court judge issued a protective order earlier in the year requiring BF Chinatown to begin making a series of payments into the court registry in order to remain in the space while the case was being litigated. Terrell Place claimed in court documents that the tenant had neither made those payments nor relinquished the space, and in mid-August, the court granted a motion imposing sanctions against the fitness firm for failing to comply with the court-imposed protective order.

New York office buildings are facing a potential $50 billion wipeout of value thanks in part to remote work, Bloomberg News reported. The values of those properties declined nearly 45% in 2020 and are forecast to remain roughly 39% below pre-pandemic levels due to the persistence of flexible work policies that gained traction during the crisis, according to a new study from the National Bureau of Economic Research. As the COVID-19 pandemic shuttered office buildings and forced people to switch to a remote work environment, many offices sat vacant and still do, even as companies try to entice employees to return. Roughly 46% of workers in the New York metro area were back at their desks in the week ended Sept. 21, according to card-swipe data from Kastle Systems. The authors of the study, which included researchers from New York and Columbia universities, found that higher-quality buildings are more insulated from the trends, as more tenants seek out better space for their remaining office footprints.