A housing market dilemma

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Speaker 5 Another week of back and forth on tariffs and an indirect back and forth on just how independent an independent agency can be under this administration.

Speaker 5 From American Public Media, this is Marketplace.

Speaker 5 In Washington, D.C., I'm Kimberly Adams in for Chai Rizdal. It's Friday, the 18th of April.
It's good to have you along, everybody. What a week it was.
Again, I feel like we're saying that every week.

Speaker 5 But anyway, here to talk about all of it, break down everything that went down. Courtney Brown from Axios and David Gurra of Bloomberg.
Hey, you two.

Speaker 6 Hey, Kimberly.

Speaker 7 Hey, Kimberly.

Speaker 5 I want to start with you, David, and what was kind of the biggest news for us in the business and economics field this week, which was President Trump really going in on Fed Chair Jerome Powell, saying in the Oval Office, if I want him out, he'll be out real fast, believe me.

Speaker 5 Jerome Powell obviously saying again and again that he has no intention of leaving. How serious is this threat to the Fed's independence?

Speaker 6 I think that it got more serious this week.

Speaker 6 So those comments in the Oval Office came after a post on Truth Social from the President, which he floated the idea of terminating the Fed chair, something that hasn't happened before.

Speaker 6 And this is kind of shaky legal ground. The Fed chair, Jay Powell, has been really adamant that the president doesn't have the right to remove him.
as Fed chair.

Speaker 6 And I think it's no secret from that quote you just read and sort of what we've heard over these last few months that the president really doesn't like Jay Powell or the way he's approaching this job, even though we should point out he did pick Jay Powell to be the Fed chair for a second term.

Speaker 6 It's not just the president who's kind of talking him down publicly.

Speaker 6 Kevin Hassett, his chief economic advisor, said today that the president and his team are going to continue to study whether the president has the ability to remove him, kind of cast into question the way that the Fed managed the economy when President Biden was in office.

Speaker 6 So all of this is kind of sowing doubt about the institution itself, eroding that independence the more it comes up.

Speaker 6 And just to step back a little bit more here, I think it's part of this larger conversation about the heads of these independent organizations, how safe they are.

Speaker 6 We've seen challenges in the Supreme Court. We've seen FTC commissioners removed by the president.
They're fighting to get those jobs back.

Speaker 6 So, you know, it got more serious today, and I think it really highlights the fact that we have a really direct challenge by this administration against kind of long-standing independence, not just in the Fed, but other institutions in the federal government.

Speaker 5 Courtney, can you talk about why so many in economics and politics are worried about the idea that the Fed might not be independent, that President Trump would make a move like this?

Speaker 5 What kind of fallout are they concerned about?

Speaker 8 I think the question that everyone has on their mind right now in financial markets for President Trump is, can you not do this right now?

Speaker 8 This is always, you know, something that Wall Street is worried about.

Speaker 8 I think if you think of the global economy as a giant Jenga tower, the Fed independence block is the one you don't want to take out because it'll all come, you know, crumbling down.

Speaker 8 I think that this idea that the President can terminate or fire or remove the Fed chairman,

Speaker 8 that is a scary idea because

Speaker 8 it makes the possibility real that the Fed is not making important decisions about the economy because he or she believe that's the best decision, but because the president told them to.

Speaker 8 And here's why that's particularly bad right now. We are on the cusp of what might be,

Speaker 8 I was going to say inflation shock, but I think it's more of a re-inflation shock, if you will.

Speaker 8 And it is so important that the nation believes that the Fed is independent and the nation believes that the Fed is going to work to crush inflation. And this is good news for President Trump.

Speaker 8 If they believe that,

Speaker 8 there is a chance that this tariff-related inflation problem that everyone is expecting might not be that bad.

Speaker 5 You know, it's interesting. This week we saw the European Central Bank cut interest rates.
Canada held steady. And David, as you know, the President really wants Powell to cut interest rates.

Speaker 5 Why does the economic outlook look so different for, say, what Europe is making its decisions based on versus what we're doing here. Aaron Powell, Jr.:

Speaker 6 You look at Europe, and it's been battling kind of weaker growth for many months now, and that's kind of been what's driving its central banks. The ECB has cut rates, I think, seven times this year.

Speaker 6 It's now at about 2.25%, so much lower interest rate. That's been their kind of overarching ethos, and that's because of their trade relationships, their trade picture.

Speaker 6 It's because of the war in Ukraine. It's just been a different story in Europe.

Speaker 6 And I think what we saw this week, yes, was another cut, but also this kind of broader awareness articulated by the head of that bank, by Christine Lagarde, that what the U.S.

Speaker 6 is doing, this trade war that the U.S. is waging, stands to really upset Europe's outlook for growth even more, the world's outlook even more.

Speaker 6 And there was really kind of a stern warning from her just about the uncertainty that lies ahead.

Speaker 6 And I think if there's a theme to this week, it's just the fact that all of these institutions are really grappling with that uncertainty that's been kind of infused into the global economy by the U.S.

Speaker 6 over the last few weeks.

Speaker 5 Courtney, you wrote about this week, this this week for Axios about just how much this trade war is shaking the global order. I mean, have we gone past a point of no return here?

Speaker 8 That seems to be the message from these institutions that

Speaker 8 are getting ready to descend on Washington if they haven't arrived already for the IMF World Bank spring meetings and thinking about the World Trade Organization or the International Monetary Fund, the IMF.

Speaker 8 There was this gloomy message from leaders this week that I expect will continue into next week about what other countries need to be doing to prepare for a world

Speaker 8 kind of without the U.S., a world where the U.S.

Speaker 8 is not

Speaker 8 the buyer of last resort, if you will, as it has been for decades and decades. And it's awkward.
It's super awkward because essentially what these leaders were saying sounded very trumpy.

Speaker 8 They were talking about how countries need to not carry on these trade imbalances because it stokes trade conflict, and countries need to think about where else to look.

Speaker 8 You can't be so reliant on the U.S. And that is the gripe that President Trump and his advisors have with the trading system.
It's that

Speaker 8 all of these other countries have so long relied on the U.S. as a buyer to kind of build economic growth.
And those times might be behind us for forever. That's scary, but it might be the case.

Speaker 5 Well, that is all the time we have today. Courtney Brown from Axios and David Gora from Bloomberg.
Thank you both so much.

Speaker 8 Thank you. Thank you.

Speaker 5 Wall Street today was closed for the Good Friday holiday, but the global economy keeps chugging along. We'll have the details when we do the numbers.

Speaker 5 Good news and bad news in the housing market. The good news, mortgage rates have dipped a bit and sellers are finally selling, which is helping with the housing shortage.

Speaker 5 Housing inventory is is 19% higher than it was a year ago, according to Zillow's new housing market report. The bad news, though, buyers still aren't buying.
Marketplace's Kaylee Wells explains why.

Speaker 7 A lot of sellers hadn't been selling because of what's known as the lock-in effect.

Speaker 6 Homeowners have very low interest rate. We have heard that they did not want to give that up.

Speaker 7 Lawrence Yoon with the National Association of Realtors says the march of time still brings retirements and divorces and kids moving out and reasons to sell anyway.

Speaker 6 Life-changing events means people have to sell their home, even if they have to give up their low interest rate.

Speaker 7 Listings are up 9% compared to last year, but sales have barely budged. Timothy Savage at NYU's Shack Institute of Real Estate says that's partly down to tariff-induced economic uncertainty.

Speaker 6 Until potential buyers have some clarity about what's going on in Washington, we'll sit on the sidelines. Quite frankly, I would.

Speaker 7 The other reason is simple. Potential buyers still can't afford a new house, says Lance Lambert, co-founder of the housing market outlet, Rezi Club.

Speaker 6 We had this period during the pandemic housing boom where home prices went up 40, 50% nationally.

Speaker 7 He says, sure, mortgage rates have dipped a bit, but when you look at housing prices through the lens of how much people are earning, This is one of the worst periods the past two years for housing affordability in almost four decades.

Speaker 7 Lambert says housing affordability is at least no longer getting worse, but getting it back to pre-pandemic normal will take years. I'm Kayleigh Wells for Marketplace.

Speaker 5 Alongside the cost of owning or renting a home, the other big cost for most Americans is food. And about 42 million people in the U.S.
now get SNAP benefits, what used to be known as food stamps.

Speaker 5 In the last few years, those benefits have become an increasingly popular target for thieves.

Speaker 5 It's been such a big problem that at the end of 2022, Congress approved a big pot of money to reimburse people for stolen benefits.

Speaker 5 But that funding ran out at the end of last year and hasn't been reauthorized. Marketplace's Samantha Fields reports.

Speaker 11 On the morning of February 1st, Amelia Feliciano went grocery shopping at BJ's. She remembers because it was the day her SNAP benefits arrived.

Speaker 6 I woke up, called my benefit card. I'm excited, got the kids ready to go.

Speaker 11 She loaded her two- and four-year-old into the car and drove to the store about 15 minutes from her home in New Haven, Connecticut. Once they got there, she double-checked the balance on her EBT card.

Speaker 11 It's all good. She had about $1,000 and she started shopping.

Speaker 6 When I came out to check out, there is no money in the card. Decline.
There was not even one penny left.

Speaker 11 She didn't know what to do, standing there with her cart full of groceries, her kids already eating chips and cookies.

Speaker 6 I called my mom. She cashed at me the last $23 that she had so I could pay for what my kids were eating.

Speaker 6 I apologized to everyone that that was around me, went back to the car, and I just cried.

Speaker 11 This kind of thing happens all the time.

Speaker 4 In the last few years, hundreds of millions of dollars were stolen from the lowest income households.

Speaker 11 Justin King is policy director at Propel, a software company that has an app that lets people manage government benefits. He says Snap is easy to steal.

Speaker 4 EBT cards only have the black magnetic stripe on the back of them, and they don't have the chip that you find on your credit card and your debit card.

Speaker 11 There's a reason credit and debit cards pretty much all have chips now. They're much more secure.

Speaker 11 Jamie Topolsky, senior director of government payment products at Conduent, says chips encrypt the data on cards and generate a unique code every time the card is used. Magnetic stripes do not.

Speaker 6 Most likely what's happening is that the thieves are able to surreptitiously install what's called a skimming device on a point-of-sale terminal or an ATM that copies the information off of a magnetic stripe when someone uses it.

Speaker 11 They're then able to use that account information and PIN to make a fake copy of the card.

Speaker 6 And he says with SNAP benefits, they know the schedule from experience of when funds get loaded. And so as soon as those funds hit, they will go shopping to deplete those funds as quickly as possible.

Speaker 11 And often buy things they can resell for cash. That's likely how Amelia Feliciano had her benefits stolen so quickly.

Speaker 11 Edward Josephson, an attorney with the Legal Aid Society in New York, says credit and debit cards used to be more vulnerable to this kind of theft too.

Speaker 6 Chip technology exists because if the banks have to reimburse us for stolen money,

Speaker 6 they want to stop the stealing.

Speaker 11 Unlike banks, the federal government does not currently reimburse people who have their SNAP benefits stolen. And there's no federal requirement EBT cards be made more secure either.

Speaker 11 A few states are starting to transition to chip cards, and others are considering it.

Speaker 12 But obviously, funding is an issue. They need the funds to do so, to make the transfers, to update the software, and to mail the cards to every SNAP recipient.

Speaker 11 Jessica Gonzalez-Rojas, an assembly member in New York, says that would likely cost her state about $40 million.

Speaker 1 But.

Speaker 12 If you switch to the chip-enabled card, you could prevent 87% of the skimming of benefits.

Speaker 11 There are other things states could be doing to reduce benefit theft, says Justin King at Propel.

Speaker 4 We could be blocking transactions at known fraudulent outlets. We could be messaging people to say, do you recognize this transaction? Do you approve it?

Speaker 11 Or letting people lock their cards when they're not using them. Amelia Feliciano would love that option.
Right now, all she can do is keep changing the pin on her card.

Speaker 6 When I tell you I changed my pin so many times, it came back to the next time for me to go grocery shopping. I forgot my pin.

Speaker 11 But she says she'd rather have to remember a new pin than not have any money for food. I'm Samantha Fields for Marketplace.

Speaker 5 Coming up.

Speaker 14 The dream scenario for us in our price range doesn't exist here.

Speaker 5 Adjusting the American dream. But first, let's do the numbers.

Speaker 5 The markets were closed today in observance of Good Friday, but for the week, the Dow Jones Industrial Average fell 2 2 3rds percent, the NASDAQ dropped 2 and 6 tenths percent, and the SP 500 lost 1 and 6 tenths percent.

Speaker 5 The administration is erecting another trade barrier between the U.S. and China, port fees on Chinese-flagged vessels and even higher fees on Chinese-built Chinese-flagged vessels.

Speaker 5 In Shanghai, China's giant Costco shipping dipped just under a tenth of a percent. Markets were also closed in Europe today, no bond trading today either.
You're listening to Marketplace.

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Speaker 5 This is Marketplace. I'm Kimberly Adams.
As much as the trade war is influencing what we see in the markets and what shows up in our meals, so too does climate change.

Speaker 5 Take, for example, domestically harvested shrimp. Maine shrimp are small, pink, delicate, and some say delicious enough to eat raw.

Speaker 5 But raw or cooked, the shrimp haven't been available in recent years.

Speaker 5 This season, fishermen and consumers were hopeful that a survey this winter would reveal that the shrimp population had recovered enough that some might even hit markets or restaurants.

Speaker 5 Caroline Loseneck in coastal Maine has more.

Speaker 9 Gary Libby is busy working on lobster gear in his workshop in Port Clyde, Maine.

Speaker 16 This is my trap I'm just finishing. These are my buoys.
I painted them earlier.

Speaker 1 They're pink and green.

Speaker 16 These ones here show up good from a distance.

Speaker 9 Libby is 67 and has been a commercial fisherman for half a century.

Speaker 16 This is what I do in the winter when I'm not fishing, try to keep my gear in good shape.

Speaker 9 He'd love to be out fishing for Maine shrimp, but he can't. And he even sold his shrimp boat and gear years ago.

Speaker 9 Except for very small catches for science, Maine's commercial shrimp fishery has been shut down for 11 years. The population is considered depleted.

Speaker 9 and scientists say that warming waters in the Gulf of Maine are hard on shrimp. They think they're marching north.
Before the closures in the mid-80s and 1990s, Libby would pull in 1,000 pounds a day.

Speaker 16 And then towards the early 2000s, we was catching a thousand pounds for every owl we towed. We was coming in with five, six thousand almost every day.

Speaker 9 Back then, those tiny shrimp didn't bring in big bucks.

Speaker 16 Fifty cents a pound, maybe.

Speaker 9 But still, shrimp filled a niche in the cold months when fishing offshore for other species is too dangerous. And the little pink shrimp had a big impact.

Speaker 10 And it was just such a part of our winter culture here.

Speaker 9 That's Ben Martenz, executive director of the Maine Coast Fishermen's Association.

Speaker 10 You know, shrimp was something that when you drive down the Coast Route 1 in Maine, you'd see people on the side of the road selling shrimp.

Speaker 9 At its peak in 1996, the shrimp catch in Maine was about 6% of all seafood earnings in the state that year. But the moratorium stopped all that until this winter.

Speaker 10 So when there was this announcement that there was going to be a very small, limited fishery that would allow fishermen to go and try to show that there were shrimp in the ocean, there was a lot of excitement.

Speaker 9 And the seven main fishermen would get paid for their catch.

Speaker 10 And unfortunately, they did not have a lot of great success.

Speaker 10 I also talked to a lot of fishermen who didn't think that the shrimp were there because they were believing in the science and what the data had been showing over the past decade or so.

Speaker 9 Marten says the boats that went out knew what they were doing. These are fishermen who know the ocean.
They understand shrimp.

Speaker 10 You know, they picked the right people to go out and chase those shrimp.

Speaker 9 But warming temperatures and predators hurt the species. Squid, which love warmer water, have been moving in on the shrimp.
Dr.

Speaker 9 Kathy Mills is a senior scientist at the Gulf of Maine Research Institute.

Speaker 19 Even if one condition becomes favorable for shrimp again, the population would need time to reestablish.

Speaker 9 The official numbers aren't in yet, but it seems the shrimp haul was nowhere near the catch limit of 58,400 pounds. And the disappointment has spread around the state.

Speaker 2 Yeah, we was counting on the main shrimp.

Speaker 9 That's Kendall Delano Jr. He owns Delano, Seafood Market, and Shack in Waldoboro, Maine.

Speaker 2 We use them in the shack as deep-fried shrimp and prim salad rolls.

Speaker 9 Delano got no shrimp from the winter catch, and he has 220 disappointed customers who are on his waiting list.

Speaker 2 But I've had people message me to say, I don't care, I spend $25 pound in the shell because we miss them, we haven't had them, we got a taste.

Speaker 9 Delano is holding out hope. He says shrimp come and go in cycles, and there have been years when the population crashed and then rebounded.
He's crossing his fingers for a comeback.

Speaker 9 In Portland, Maine, I'm Caroline Losnick for Marketplace.

Speaker 5 Like Kaylee Wells was mentioning earlier, the housing market is a tough one, with high mortgage rates and home prices, plus low housing supply.

Speaker 5 All that can be especially discouraging for first-time buyers. And yet, despite these obstacles, there are still folks taking the plunge.

Speaker 5 That brings us to the first installment of our new Adventures in Housing series, all about first-time buyers.

Speaker 14 My name is Naesha Brooks. We live in the city of Denver.
We are first-time homebuyers. We closed on our home in May of 2023 and we are a family of 10.

Speaker 14 We were on Section 8 and we had given ourselves five years to be on Section 8 because we had been renters for, you know, our entire adult lives.

Speaker 14 We just said, you know, for the amount of money that we're paying, the market price really isn't that much more off than what we're currently paying for rent. Why not invest in ourselves?

Speaker 14 And my husband, his parents, they had purchased a home when he was younger. Unfortunately, when his mother passed away, the home no longer stayed in the family.

Speaker 14 And then on my side of the family, the only homeowner that I know of is my grandmother.

Speaker 14 So, you know, if you think about generational gaps, we are the next generation to have accomplished home ownership.

Speaker 14 The dream scenario for us in our price range doesn't exist here where we are.

Speaker 14 So we had to readjust our dream. You know, I definitely have like panic attacks.
during the process, you know, but immediately I became like a mini credit guru.

Speaker 14 I started becoming obsessed with our credit and I started to learn how to, you know, attack things on our credit reports that, you know, did not look great in the eyes of lenders.

Speaker 14 And then I became obsessed with budgeting. I still keep this as a habit.
I write down every bill and I budget those bills to the penny.

Speaker 14 I can tell you exactly when something changes because I know what the bills are.

Speaker 14 The house was beautiful. It looks like a dollhouse.
So when we first seen the house from the outside, we were like, oh, it might be kind of small.

Speaker 14 But when you walk into the home, it's a tri-level house. And my husband and I were like, this is, you know, this could be our

Speaker 14 first home, our fixer-upper, you know, the changes that we said we would be willing to make that was here.

Speaker 14 And then we were outside talking to our realtor and this hummingbird kept flying around our head. And I had just started gardening.
So I had become obsessed with attracting hummingbirds.

Speaker 14 And I just felt like that was like an omen of we'll meet you here if you stay here.

Speaker 14 We ended up closing on a house for $430,000. You know, we've moved before, you know, but this is like, it's different when you're moving, you're saying, this is our home.

Speaker 14 We accomplished this. And it was wonderful seeing our kids run in and be like, this is our house.

Speaker 14 This is our house. This is it.

Speaker 5 Naisha Brooks out in Denver, Colorado. We can't do this series without you.
We want to hear more from first-time homebuyers. Marketplace.org slash adventures in housing.

Speaker 5 This final note on the way out today, since we were talking about the fishing industry earlier, yesterday the White House issued two executive orders many in that industry are celebrating.

Speaker 5 One directs federal agencies to roll back regulations the administration determines are overly burdensome.

Speaker 5 Another opens up about 500,000 square miles of a marine national monument located between Hawaii and American Samoa to commercial fishing.

Speaker 5 Several environmental groups are criticizing the orders, which, like just about every move from the White House these days, are likely to end up in court. Our theme music was composed by B.J.

Speaker 5 Lederman. Marketplace's executive producer is Nancy Fargali.
Donna Tam is the executive editor. Neil Scarborough is the vice president and general manager.
And I'm Kimberly Adams.

Speaker 5 Have a great weekend, everyone, and we will be back on Monday.

Speaker 5 This is APM.

Speaker 13 You've finally broken loose from work. Three friends, one tea time,

Speaker 5 and then the text.

Speaker 13 Honey, there's water in the basement.

Speaker 13 Not exactly how you pictured your Saturday. That's when you call us, Cincinnati Insurance.
We always answer the call because real protection means showing up, even when things are in the rough.

Speaker 13 Cincinnati Insurance, let us make your bad day better.

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