Packages containing nearly 56 pounds of methamphetamine seized by CBP officers at Laredo Port of Entry. USCBP image
Texas Border Business
LAREDO, Texas—U.S. Customs and Border Protection, Office of Field Operations officers assigned to the Colombia-Solidarity Bridge seized methamphetamine that totaled over $513,000 in street value.
“This methamphetamine interception is a testament to the skill and commitment of our CBP officers at the Colombia-Solidarity Bridge,” said Port Director Alberto Flores, Laredo Port of Entry. “Their dedication to our border security mission continues to disrupt the operations of transnational criminal organizations and protect our communities from the dangers of illicit narcotics.”
The seizure occurred on Friday, June 27 at the Colombia-Solidarity Bridge, when a CBP officer referred a 2011 Toyota Sienna for a secondary inspection. Following a canine, nonintrusive inspection system scan and physical inspection of the vehicle, CBP officers discovered 14 packages containing a total of 55.86 pounds of alleged methamphetamine within the driver’s personal belongings.
The seized narcotics have a total estimated street value of $513,692.
CBP seized the narcotics. Homeland Security Investigations special agents are investigating the seizure.
Fireworks on Independence Day originated from ancient Chinese practices and were later adopted into European celebrations before becoming a staple of July 4th festivities in the United States. The first organized Independence Day celebrations in 1777, held in Philadelphia and Boston, included fireworks displays.
Love of America and it’s founding in liberty should never be debated. Now more than ever it seems we need to be reminded about the most foundational reasons why we celebrate July 4th.
Two nationals of the People’s Republic of China (PRC) made their initial appearances in federal court in Portland, Oregon, and Houston, Texas, to face charges issued out of the Northern District of California for acting as agents of the Government of the PRC without prior notification to the Attorney General. Image for illustration purposes
Texas Border Business
U.S. Department of Justice
Two nationals of the People’s Republic of China (PRC) made their initial appearances in federal court in Portland, Oregon, and Houston, Texas, to face charges issued out of the Northern District of California for acting as agents of the Government of the PRC without prior notification to the Attorney General. The defendants, Yuance Chen, 38, a PRC national and legal permanent resident who resides in Happy Valley, Oregon, and Liren “Ryan” Lai, 39, a PRC national who traveled from the PRC to Houston, Texas, on a tourist visa in April 2025, were arrested Friday on a criminal complaint charging them with overseeing and carrying out various clandestine intelligence taskings in the United States on behalf of the PRC Government’s principal foreign intelligence service, the Ministry of State Security (MSS). These activities included facilitating a “dead drop” payment of cash for information relating to the national security of the United States previously provided to the MSS, gathering intelligence about U.S. Navy service members and bases, and assisting with efforts to recruit other individuals from within the U.S. military as potential MSS assets.
Chen and Lai were arrested on June 27, 2025, by the FBI in Happy Valley, Oregon, and Houston Texas, as part of a coordinated counterintelligence and law enforcement operation across multiple states.
“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” said Attorney General Pamela Bondi. “The Justice Department will not stand by while hostile nations embed spies in our country – we will expose foreign operatives, hold their agents to account, and protect the American people from covert threats to our national security.”
“The FBI arrested two Chinese nationals who were allegedly attempting to recruit U.S. military service members on behalf of the PRC,” said FBI Director Kash Patel. “The Chinese Communist Party thought they were getting away with their scheme to operate on U.S. soil, utilizing spy craft, like dead drops, to pay their sources. This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI San Francisco, Portland, Houston, San Diego, and the Counterintelligence Division. The FBI will continue to vigilantly defend the homeland from China’s pervasive attempts to infiltrate our borders.”
“Adverse foreign intelligence services like the PRC’s Ministry of State Security dedicate years to recruiting individuals and cultivating them as intelligence assets to do their bidding within the United States,” said Assistant Attorney General for National Security John A. Eisenberg. “Under my leadership, the National Security Division will continue to defend our nation and neutralize our adversaries’ clandestine spy networks.”
“These charges reflect the breadth of the efforts by our foreign adversaries to target the United States — this time by conducting illegal intelligence-gathering operations aimed at our national security information and military service members,” said U.S. Attorney Craig H. Missakian for the Northern District of California. “My office and the FBI remain ever vigilant in guarding against these threats to the United States. We will continue to undertake counterespionage investigations and prosecutions, no matter how complex and sensitive, to disrupt attempts to weaken our national security.”
“NCIS and the Department of the Navy take the foreign intelligence gathering threat very seriously, as the PRC has for years attempted through various means to recruit U.S. service members as intelligence assets due to their access to sensitive military information,” said Director Omar Lopez of the Naval Criminal Investigative Service (NCIS). “NCIS and the Department of the Navy (DON) remain committed to working together to root out any attempts to compromise the DON’s critical warfighting and shipbuilding capabilities.”
As alleged in the criminal complaint unsealed yesterday, the PRC Government conducts intelligence activities against the United States through multiple arms, including the MSS. The MSS handles civilian intelligence collection for the PRC and is responsible for counterintelligence and foreign intelligence, as well as political security. The MSS and its bureaus seek to obtain information on political, economic, and security policies that might affect the PRC, along with military, scientific, and technical information of value to the PRC. The MSS and its bureaus are tasked with conducting clandestine and covert human source operations, of which the United States is a principal target.
As alleged in the criminal complaint, Lai recruited Chen to work on behalf of the MSS in or about 2021. While in Guangzhou, China, in January 2022, Lai and Chen worked together to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS, working with other individuals located in the United States to leave a backpack with the cash at a day-use locker at a recreational facility located in Livermore, California.
Following the January 2022 dead drop, Lai and Chen continued to work on behalf of the MSS, including by attempting to help identify potential assets for MSS recruitment within the ranks of the U.S. Navy. For example, in 2022 and 2023, Chen was tasked by Lai to visit a U.S. Naval installation in Washington State and a U.S. Navy recruitment center in San Gabriel, California. While in the recruitment center, Chen obtained personal information for recruits that he appears to have transmitted to an MSS intelligence officer in China. The complaint also alleges that Chen received instruction from the MSS on how to engage and recruit future Sailors and methods for minimizing his risk of exposure. Eventually, Chen began contacting a Navy employee over social media and provided information about the employee to the MSS. The complaint alleges that Chen traveled to Guangzhou and met with MSS intelligence officers in April 2024 and March 2025 in order to discuss compensation and specific taskings.
The complaint also alleges that Lai traveled to Houston, Texas, in April 2025, claiming that the purpose of his visit was related to his business as an online retail seller, and that he would be staying in the Houston area for two weeks. However, on May 9, 2025 – more than four weeks after his arrival in the United States – Lai traveled by car with a companion from Houston to Southern California, via New Mexico and Tucson, Arizona, before returning to Texas, on May 15, 2025.
Chen and Lai are charged with violating Title 18, United States Code, Section 951, which makes it a crime for a person to operate or agree to operate within the United States as an agent of a foreign government without notification to the Attorney General of the United States. If convicted, the defendants face a fine of up to $250,000 and a term of imprisonment of up to 10 years.
The FBI San Francisco Field Office is leading the investigation, with valuable assistance provided by the FBI Portland, Houston, and San Diego Field Offices. NCIS also provided valuable assistance during the operation.
The National Security and Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District of California and the National Security Division’s Counterintelligence and Export Control Section are in charge of the prosecution. Significant operational support and assistance is also being provided by the District of Oregon, the Southern District of Texas, and the Southern District of California.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
President Donald Trump and entrepreneur Elon Musk have resumed public disagreements over a major fiscal proposal, with each expressing criticism and warnings on Monday, July 1, 2025. Image for illustration purposes
Texas Border Business
Texas Border Business
President Donald Trump and entrepreneur Elon Musk have resumed public disagreements over a major fiscal proposal, with each expressing criticism and warnings on Monday, July 1, 2025.
According to The Washington Post, Elon Musk described the Republican tax-and-spending proposal—known as the “One Big Beautiful Bill”—as “a disgusting abomination” and “pork-filled.” According to the same report, Musk warned that the legislation would expand the federal deficit and harm emerging industries. According to Al Jazeera, he also suggested that this development could lead him to form a new political organization, tentatively named the “America Party.”
According to Politico, President Trump responded by stating that the Department of Government Efficiency (DOGE), where Musk previously served in an advisory role, might conduct audits into federal subsidies and contracts awarded to Musk’s companies, including Tesla and SpaceX. According to the same report, Trump said Musk “may have received more subsidies than anyone else” and suggested, “without subsidies, Elon would probably have to close up shop and head back home to South Africa.” According to The Times (UK), President Trump also commented, “we’ll have to take a look” at Musk’s citizenship status in what some observers described as a rhetorical remark.
According to Reuters, Elon Musk resigned from his formal role at DOGE on May 30, 2025. According to PolitiFact, the DOGE initiative Musk helped oversee was initially framed as targeting $2 trillion in federal spending reductions, although independent assessments estimate actual savings closer to $150–180 billion.
According to Barron’s, Tesla’s stock dropped approximately 5–6% on July 1 following the exchange, amid investor concerns about the dispute’s potential business and regulatory impact.
According to The Washington Post, lawmakers aim to finalize and pass the bill by July 4, 2025. According to the same source, Musk has stated that he will politically oppose Republicans who support the legislation, while President Trump continues to advocate for its passage.
Timeline of Recent Events (June 2025)
• According to The Washington Post (June 3–4), Musk first criticized the legislation as “a disgusting abomination” and cited risks to jobs and clean-energy sectors.
• According to PolitiFact (June 5–6), Trump threatened to review Musk’s business subsidies via DOGE.
• According to The Washington Post (June 28–29), Musk renewed his criticism on social media, calling the proposal “utterly insane and destructive.”
• According to AP News (July 1), the situation escalated when Trump publicly discussed oversight of DOGE by Musk’s companies and Musk hinted at a new political organization.
“The defendants used fake and stolen personal identities to conceal their North Korean nationality, pose as remote IT workers, and exploit their victims’ trust to steal hundreds of thousands of dollars,” said U.S. Attorney Theodore S. Hertzberg. Image for illustration purposes
Texas Border Business
U.S. Attorney’s Office, Northern District of Georgia
ATLANTA – Four North Korean nationals, Kim Kwang Jin (김관진), Kang Tae Bok (강태복), Jong Pong Ju (정봉주), and Chang Nam Il (창남일), have been charged in a five-count wire fraud and money laundering indictment arising from a scheme to be hired as remote IT workers and then steal and launder over $900,000 in virtual currency.
“The defendants used fake and stolen personal identities to conceal their North Korean nationality, pose as remote IT workers, and exploit their victims’ trust to steal hundreds of thousands of dollars,” said U.S. Attorney Theodore S. Hertzberg. “This indictment highlights the unique threat North Korea poses to companies that hire remote IT workers and underscores our resolve to prosecute any actor, in the United States or abroad, who steals from Georgia businesses.”
“These schemes target and steal from U.S. companies and are designed to evade sanctions and fund the North Korean regime’s illicit programs, including its weapons programs,” said John A. Eisenberg, Assistant Attorney General for the Department’s National Security Division. “The Justice Department, along with our law enforcement, private sector, and international partners, will persistently pursue and dismantle these cyber-enabled revenue generation networks.”
“North Korean operatives used false identities to infiltrate companies and steal digital assets to fund their regime,” said Paul Brown, Special Agent in Charge of FBI Atlanta. “The FBI is committed to exposing these threats and protecting U.S. businesses from nation-state cybercrime.”
According to U.S. Attorney Hertzberg, the indictment, and other information presented in court: To generate revenue for the regime, the Democratic People’s Republic of Korea (“North Korea” or “DPRK”) dispatches thousands of skilled IT workers around the world to deceive and infiltrate American companies. In October 2019, the defendants traveled to the United Arab Emirates on North Korean documents and worked there as a team. In approximately December 2020 and May 2021, respectively, Kim Kwang Jin (using victim P.S.’s stolen identity) and Jong Pong Ju (using the alias “Bryan Cho”) were hired as developers by an Atlanta, Georgia-based blockchain research and development company and a Serbian virtual token company. Both defendants concealed their North Korean identities from their employers by providing false identification documents containing a mix of stolen and fraudulent identity information. Neither company would have hired Kim Kwang Jin or Jong Pong Ju had it known the defendants were North Korean citizens. Later, on a recommendation from Jong Pong Ju, the Serbian company hired “Peter Xiao,” who in fact was Chang Nam Il.
After gaining their employers’ trust, Kim Kwang Jin and Jong Pong Ju were assigned projects that provided them access to their employers’ virtual currency assets. In February 2022, Jong Pong Ju used that access to steal virtual currency then worth approximately $175,000. In March 2022, Kim Kwang Jin stole virtual currency then worth approximately $740,000 by modifying the source code of two of his employer’s smart contracts.
To launder the funds after the thefts, Kim Kwang Jin and Jong Pong Ju used a virtual currency mixer and then transferred the funds to virtual currency exchange accounts controlled by defendants Kang Tae Bok and Chang Nam Il but held in the names of aliases. The accounts were opened using fraudulent Malaysian identification documents.
Kim Kwang Jin (김관진), Kang Tae Bok (강태복), Jong Pong Ju (정봉주), and Chang Nam Il (창남일) were indicted by a federal grand jury seated in the Northern District of Georgia on June 24, 2025.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges, and the government bears the burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation. It is part of the Department of Justice’s DPRK RevGen: Domestic Enabler Initiative. Under the Initiative, launched by the National Security Division and FBI Cyber and Counterintelligence Divisions in March 2024, federal prosecutors and agents prioritize high-impact, strategic, and unified enforcement and disruption operations targeting the DPRK’s illicit revenue generation efforts and the U.S.-based enablers of those efforts.
Assistant United States Attorneys Samir Kaushal and Alex R. Sistla, and Trial Attorney Jacques Singer-Emery of the National Security Division’s National Security Cyber Section, are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6185. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga
The bill would slash an estimated $186 billion from SNAP and fundamentally alter the program’s structure by shifting billions in costs to states like Texas. Image for illustration purposes
Texas Border Business
Feeding Texas
TEXAS – The U.S. Senate passed its version of the budget reconciliation bill, and while it differs in some respects from the House proposal, it still represents the most sweeping rollback of the Supplemental Nutrition Assistance Program (SNAP) in U.S. history. The bill would slash an estimated $186 billion from SNAP and fundamentally alter the program’s structure by shifting billions in costs to states like Texas.
Since the modern-day inception of SNAP (or “Food Stamps,” as it was formerly known) 50 years ago, the federal government has always paid 100% of the cost of benefits, guaranteeing that Americans would have access to critical food assistance during times of individual crisis, economic downturns, and natural disaster no matter where they live.
“If enacted, this bill would represent the largest rollback of food assistance in U.S. history,” said Celia Cole, CEO of Feeding Texas, the state association of food banks. “The consequences would be profound and devastating. Millions of Americans—including children, seniors, veterans, and working families—could go hungry. In addition to the significant and undue harm for vulnerable Americans, the bill also deals a blow to farmers, grocers, and our state and local economies.”
“As CEO of the Food Bank of the Rio Grande Valley, I can say with absolute clarity: these cuts are nothing short of catastrophic for our community,” said Libby Saenz. “SNAP is often the only barrier between struggling families and hunger—it gives them just six dollars a day, but it’s a lifeline that keeps kids fed and seniors safe. Slashing it—and Medicaid on top of that—will devastate families across the Valley and strain our entire local economy.”
The Senate bill would require states with SNAP error rates above 6% to pay between 5% and 15% of food benefit costs. It would also increase the state share of administrative costs from 50% to 75%. For Texas, this would mean an additional $89.5 million per year in administrative costs starting in FY2026, and $716 million per year in food benefits beginning in FY2028, assuming the state maintains its current error rates. These are new costs that Texas has never had to bear before.
Because Texas must balance its budget annually, these new obligations would force lawmakers to either raise new revenue; divert revenue from other essential services like education, healthcare, or public safety; or make the painful decision to reduce SNAP benefits for food insecure Texans.
“SNAP is a lifeline for millions of Texans, especially during times of crisis,” Cole said. “The program works because it’s federally funded and responsive to fluctuations in the economy. Offloading benefit costs to states would undermine SNAP’s ability to respond to economic downturns and natural disasters—precisely when families need help the most, and state coffers are most depleted.”
Beyond the cost shift, the bill includes several policy changes that would directly reduce access to food assistance:
● Expanded Work Requirements: The bill would subject more seniors (up to age 65) and parents (with children as young as 14) to a harsh three-month time limit unless they can document 20 hours of work per week. It also eliminates exemptions for veterans, people experiencing homelessness, and former foster youth from the time limit.
● Elimination of SNAP-Ed: The bill would fully eliminate SNAP-Ed, an evidence-based program that helps state agencies, food banks, and other local organizations provide nutrition education to thousands of Texas families.
● Limits to the Thrifty Food Plan: By restricting future updates to the Thrifty Food Plan—the formula used to calculate SNAP benefits—the bill would depress benefit levels for years to come, making it harder for families to afford groceries.
“These changes don’t just cut costs—they cut a lifeline for vulnerable Americans,” Cole said. “This is a massive cut that goes well beyond reducing waste and increasing efficiency. These provisions target families with kids, seniors, veterans, and those most in need of support. They dismantle the very tools that help Texans put food on the table and build healthier futures.”
SNAP already provides modest support—just six dollars per person per day—but it plays an outsized role in fighting hunger. Cutting this support would increase food insecurity in Texas and place even more pressure on charitable food systems.
Food banks across the state are already stretched thin. Over the past year, the Feeding Texas network has seen a surge in demand not witnessed since the height of the pandemic. Families are struggling to afford groceries, healthcare, rent, and transportation—all while inflation continues to squeeze household budgets.
“From seniors on fixed incomes to veterans seeking employment to parents trying to feed their children, the need is urgent—and growing,” Cole said. “The Senate’s proposal would only deepen this crisis, and food banks do not have the resources to fill the gap.”
The Feeding Texas network includes 20 food banks and over 3,000 local partners, most of them faith-based, working together to fight hunger in every corner of the state. But no charitable effort can replace the scale and impact of SNAP.
“Texas food banks are united in our plea: We urge members of the House to stop this bill from moving forward, to reject these harmful provisions in conference negotiations, and to protect the integrity of SNAP for the millions of Americans who rely on it,” Cole said. “A federal budget should reflect our nation’s shared values of dignity, opportunity, and a commitment to ensuring that no one in this country goes hungry. Lawmakers must come together to craft a more balanced and compassionate path forward—one that protects access to food for all.”
Feeding Texas is a network of 20 food banks and leads a unified effort for a hunger-free Texas. Learn more and find your local food bank at www.feedingtexas.org.
Pictured left to right: Nadia Inurreta, Jackeline Inurreta. Photo: Texas DPS
Texas Border Business
LAREDO – The Texas Department of Public Safety (DPS) arrested two women transporting more than $40,000 in currency during a recent Operation Lone Star traffic stop in Webb Co.
On June 23, a DPS Trooper stopped a black 2017 GMC Acadia on I-35 for a traffic violation in Laredo. During a vehicle search, the Trooper discovered three bundles of currency—two inside a purse and another inside a backpack—containing large sums of cash. The three bundles of currency totaled $43,760.
The driver, Nadia Georgina Inurreta, 27, and passenger, Jackeline Joana Maria Inurreta, 23, both of Laredo, Texas, were arrested and charged with felony money laundering. DPS’ Criminal Investigations Division (CID) continues to investigate this case.
The Texas Department of Public Safety (DPS) is stepping up enforcement efforts for the Fourth of July holiday to keep everyone safe on the roads, including Operation Crash Awareness Reduction Effort (CARE), which runs July 3-6. Photo: Texas DPS
Texas Border Business
AUSTIN – The Texas Department of Public Safety (DPS) is stepping up enforcement efforts for the Fourth of July holiday to keep everyone safe on the roads, including Operation Crash Awareness Reduction Effort (CARE), which runs July 3-6.
Operation CARE is a specialized campaign in which Texas Highway Patrol Troopers patrol for drivers who are speeding, intoxicated, not complying with Texas’ Move Over, Slow Down law or violating other laws.
“The Fourth of July is a time to celebrate our freedoms with family and friends, but safety must come first,” said Texas Highway Patrol Chief Bryan Rippee, “Whether you’re on the road, on the water or handling fireworks, make smart choices that protect you and those around you. Let’s work together to ensure everyone has a safe and happy Independence Day.”
During last year’s Fourth of July enforcement campaign, Troopers issued more than 59,521 citations and warnings, including 5,178 for speeding; 1,581 for no insurance; and more than 335 for individuals without seat belts or child seat restraints. DPS also arrested 212 people on DWI charges and 250 people for other felony charges.
DPS encourages the public to follow these safety tips during Fourth of July weekend and beyond:
Driver Safety:
Don’t drink and drive. Make alternate plans if you are consuming alcohol.
Move Over or Slow Down for police, fire, EMS, Texas Department of Transportation (TxDOT) vehicles and tow trucks stopped on the side of the road with emergency lights activated. Show the same courtesy to fellow drivers who are stopped on the side of the road. So far in 2024, there have been more than 7,044 Move Over, Slow Downviolations.
Buckle up everyone in the vehicle — it’s the law.
Slow down, especially in bad weather, heavy traffic, unfamiliar areas or construction zones.
Eliminate distractions while driving, including the use of mobile devices. Texas law prohibits the use of portable wireless devices to read, write or send an electronic message unless the vehicle is stopped. If you’re using a navigation device or app, have a passenger operate it so you can keep your eyes on the road.
Drive defensively, as holiday travel can present additional challenges.
On multi-lane roads, use the left lane for passing only. Not only is it courteous driving and avoids impeding traffic, Texas law requires slower traffic to keep to the right and to use the left lane for passing only (when posted).
Don’t cut in front of large trucks and try not to brake quickly in front of them. They can’t maneuver as easily as passenger vehicles and pickup trucks.
If you can Steer It, Clear It: If you are involved in a non-injury crash and your vehicle can be moved, clear the traffic lanes to minimize traffic impact. Leaving vehicles in a traffic lane increases traffic congestion and leaves those involved with an increased risk of harm or a secondary wreck. On some highways, if you don’t move your vehicle when it’s safe to do so, it’s against the law.
Keep the Texas Roadside Assistance number stored in your phone. Dial 1-800-525-5555 for any type of assistance. The number can also be found on the back of a Texas Driver License.
Check your vehicle to make sure it is properly maintained and always ensure your cargo is secure.
Report road hazards or anything suspicious to the nearest law enforcement agency.
Monitor weather and road conditions wherever you are traveling. For road conditions and closures in Texas, visit Drive Texas.
Fireworks Safety:
Use fireworks outdoors in a clear area away from buildings and flammable materials.
Keep a bucket of water or a hose nearby in case of an emergency.
Never allow young children to handle fireworks; supervise older children closely.
Light one firework at a time and never relight a “dud” firework.
Dispose of used fireworks by soaking them in water before discarding them.
DPS would also like to remind Texans about theiWatchTexas program, a critical resource for reporting suspicious activity within the community to help prevent dangerous attacks. It’s especially important to be vigilant as people gather for parades, festivals and other community events. Tips can be reported via the website, the free iWatch iOS or Android mobile app or by calling 844-643-2251. All reports are confidential. For information on how to use iWatchTexas, you can view this how-to video.
Remember, iWatchTexas is not for emergencies. If there is an emergency, call 911 immediately.
The US housing market continues to struggle, with 2024 sales of existing homes reaching a 30-year low and affordability remaining a major challenge for many potential buyers. Image for illustration purposes
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Dr. M. Ray Perryman, President and Chief Executive Officer of The Perryman Group. Courtesy Image
The US housing market continues to struggle, with 2024 sales of existing homes reaching a 30-year low and affordability remaining a major challenge for many potential buyers. Although the most recent data shows some signs of improvement in selected measures, other problems are persisting. Let’s hit a few high points.
May sales of existing homes across the nation were up slightly compared to April (on a seasonally adjusted basis) but were down compared to last May. Sales of new homes were also down. Uncertainty across the economy is one factor giving buyers pause, but the other major issue is high cost due to prices, interest rates, and escalating insurance rates.
Prior to the pandemic, median sales price levels for US homes were trending in the $325,000-$350,000 range. Beginning in early 2020, however, prices surged as people sought larger homes and changed geographic locations in response to COVID-19. By late 2022, the median sales price reached $442,600. Though down to $416,900 most recently (somewhat higher for new homes), it remains a major escalation in just a few years’ time.
Part two of the affordability problem is interest rates. The Federal Reserve responded to the pandemic with low interest rates, and mortgage rates were below 3% for much of 2020 and 2021. As conditions changed and inflation became a major problem, the Fed pushed interest rates up quickly, and mortgage rates topped 7% by late 2022 and were even higher at points in time. The most recent data indicates some relief, but not much.
It’s no coincidence that home prices and interest rates moved in opposite directions; buyers paying 3% interest could (and did) take on larger principle amounts and still afford payments. However, the housing market is now somewhat stuck. High prices without low interest are squeezing many buyers out of the market. To make matters worse, with higher building costs and more weather events, insurance rates are up 34% nationally and over 50% in several states.
Even though new homes have been getting somewhat smaller over the past few years, prices remain elevated. The situation is particularly challenging for starter homes, and the income required to qualify to purchase one is well beyond the resources of many families. As a result, the age of first-time home buyers is also up since the pandemic.
It will likely take a while for real improvement. Housing supplies are finally beginning to recover, contributing to a better market for buyers. However, the Fed will probably hold interest rates steady for now. Other costs of homeownership are also more expensive than in the past, further slowing market recovery. It may well take a while to work through the various imbalances, but we’ll get there. Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 3,000 clients over the past four decades.
