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CarMax Stock Drops Over 20% After Weak Earnings Report

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

CarMax Stock Drops After Disappointing Quarterly Results

NEW YORK – September 25, 2024 ‌- Shares of CarMax Inc. plunged on Thursday after​ the company⁣ reported quarterly earnings that fell short of Wall‍ Street expectations, signaling potential⁤ headwinds⁢ for the broader ‍automotive retail sector. The stock‍ decline‌ triggered‌ a ripple effect, pulling down shares of ⁤other major car retailers.

carmax reported adjusted earnings ⁤per share and revenue figures that missed analyst ⁢forecasts. while the company noted it was in‌ a ​”better position” with inventory and pricing at the start of the quarter,⁤ investors reacted negatively too the overall financial performance.

The company’s results are ⁣closely watched by⁤ industry observers as an ‌early indicator of how​ other car retailers are performing. Following CarMax’s report, shares⁣ of Group ​1 Automotive, Autonation, Sonic ‌Automotive, ⁤Carvana,‌ and ‌Lithia ⁢Motors all experienced declines, falling by roughly 5% or less during intraday ⁤trading midday Thursday.

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World

Jimmy Kimmel Live! Returns Amid FCC Pressure

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

Jimmy⁣ kimmel Returns to ⁤Air Amid Protests and Support in Hollywood

LOS ANGELES -⁤ “jimmy ‍Kimmel Live!” resumed taping‌ Tuesday‍ at the el Capitan Entertainment center on Hollywood ⁣Boulevard, drawing both protesters and supporters⁢ responding to recent controversy surrounding host Jimmy Kimmel.

Protests arose following comments Kimmel made ‌that drew criticism. ​Perry‌ Caravello, a YouTuber protesting‌ Kimmel’s return, stated, “He should ‍be off the air ‌for another full week if not a full ⁢month to think about what he said.”

Conversely,⁣ gregg Donovan, carrying a sign welcoming‍ Kimmel back, emphasized⁣ freedom of speech, saying, “this is America. I don’t think free speech will ever really be⁤ threatened.” Donovan wore a black ​top hat and red blazer. Another supporter, known as “Hollywood Harlequin,” also displayed a sign of support.

The El Capitan Entertainment Centre is located across from the TCL⁣ Chinese ⁤Theater and along the ⁣Hollywood Walk of Fame, which includes stars honoring figures like roy Disney, ‌Eva Longoria, ‌Kelly Ripa, Paul Rudd, and Chris Pratt.

CNBC’s ‌Lillian Rizzo and Sara Salinas contributed to ⁤this report.

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World

Single-Family Rent Growth Slows Amid Consumer Struggles

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

Single-Family Rent Growth Slows, Signaling Potential Shift in Market Dynamics

Recent data indicates a slowdown in single-family ⁣home rent growth, ⁣potentially reflecting increasing financial ⁢pressures on consumers. According to ‌cotality, single-family rent prices ⁢in July⁣ increased 2.3% year-over-year, a deceleration from ‌the 3.1% average rise observed in july 2023. This marks a fall below the lower end of the 10-year average range of pre-pandemic ‍growth.

Molly ‌Boesel, senior principal economist at Cotality, ​noted ⁤the‍ weakening trend,⁤ stating, “After a strong start to the year,‍ single-family rent growth is​ clearly losing steam. In July, we broadly saw weakening⁤ in annual⁢ single-family rent growth across metro areas and price tiers.” monthly growth in July was just ​0.2% higher than⁤ in June, substantially ​lower than the ancient⁢ July average of 0.7%.

While most major metropolitan areas are experiencing ⁢this cooling, ⁣Chicago is an exception, leading the‌ nation ⁢with 5.1% rent growth, driven⁤ by tight inventory and consistent demand. New York City followed with 3.7% growth, ⁢with Philadelphia, Washington ⁤D.C., and los Angeles rounding out the top​ five. In‍ contrast, Dallas and Miami showed the slowest growth, with Miami experiencing no rent growth at all – a stark contrast to the‌ 40% annual increase seen in 2022 due to pandemic-related ⁤migration.

The slowdown extends​ across all price ​points. high-end​ properties saw a 2.9% annual increase, down from 3.2% last July, while low-end rents rose 1.6% annually, a decrease from 2.8% ⁤in July 2023.

This shift comes after‍ a period where single-family rentals outperformed apartment rentals,⁤ largely ​due to ‌a surge in multifamily supply ⁤and high ⁣for-sale home‌ prices. Many ‌families,‌ traditionally homebuyers, opted for single-family rentals in desirable school districts.

Single-family rental REITs, including Invitation Homes and American Homes 4 Rent, have responded to this demand by developing⁣ more rental communities.⁤ It remains to be seen whether ⁤the recent weakening⁢ in ⁤rent​ growth will lead these REITs to adjust their‌ building strategies. Recent data from Parcl⁣ Labs indicates that these large REITs were already ⁢shifting their focus, selling more individual properties to consolidate holdings into larger, purpose-built rental communities.

To receive future editions of this real⁢ estate ‌market analysis,sign up for ​CNBC’s Property Play newsletter: https://www.cnbc.com/lander?id=propertyplay-newsletter

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World

Student Housing Market Slows: Affordability Drives Demand

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

summary​ of the CNBC Article on Student Housing:

This CNBC article focuses ⁤on⁤ the current state of the⁤ student⁢ housing market, with⁤ insights from⁢ Scion CEO, Robert Bronstein. HereS a breakdown of the ⁣key takeaways:

Key Trends:

* Shift to Affordability: Students ‌adn parents are prioritizing cost savings over luxury‌ amenities. ‌ Even those ⁤who coudl afford premium ‌options are ⁢opting for less expensive, slightly‌ older properties.Features like hot tubs ⁤and golf simulators are losing their appeal.
* Demand for Functionality: ‍Students​ now value practical spaces ⁤like co-working ‍areas and remote interview rooms more than ⁢entertainment-focused amenities.
* Growth in‍ Large⁤ Public​ Universities: Investment is increasingly focused on large, flagship public universities experiencing⁢ record enrollment growth. These schools can’t keep up with housing ⁤demand.
* Southeastern & Big Ten Conferences Hotspots: The Southeastern Conference (SEC) remains the ⁤most active area for student ⁢housing investment, but the big ⁣Ten is gaining momentum.
* Decreased New Progress: Higher ⁣construction and capital costs are slowing⁣ down new development, which will likely increase the⁤ value of existing properties.

Scion’s Strategy:

* Focus on the Middle ​Market: Scion acquires properties near large universities ⁣(e.g., ⁣University of Florida, Alabama, Texas A&M).
* Scale is Key: They are actively⁢ acquiring properties and aiming for meaningful​ scale within ‌target markets (thousands of beds,⁢ multiple assets) ⁢to achieve operating leverage.
* Bullish Outlook: Bronstein⁤ is optimistic about the market due to ‌enrollment growth at flagship universities‍ and the slowdown ‌in new construction.

Market Outlook (Walker ‍& Dunlop report):

* Rebounding Market: The⁤ student housing market is rebounding as interest rates stabilize and institutional capital returns.
* Functionality ​& Affordability: The report ⁢confirms the ⁤shift away from luxury amenities ⁣towards practicality ​and affordability.

In essence, the article ⁢paints a picture of a student housing⁤ market undergoing‌ a⁣ correction, driven by economic⁢ pressures and ‍changing student preferences. The focus is shifting from “luxury living” to “practical and ⁣affordable” housing near thriving, large universities.

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World

Zelman Housing Summit: Interest Rates, GSEs, and Land Concerns

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

Fannie and freddie Management Under scrutiny, ⁢Land and Labor Shortages‍ Loom Large

LAS VEGAS – Concerns over the‍ direction of fannie Mae and Freddie Mac, ‍coupled with persistent challenges in ⁣land availability and labor supply, dominated discussions at the‍ recent‌ Zelman Housing Conference, according to attendees. Investors are seeking greater clarity regarding the government-sponsored enterprises’ (GSEs) leadership and ‍strategic planning.

A key point of contention centers on‌ the independence of Fannie and Freddie’s board management. “There’s nothing autonomous about the way that Fannie ‍and Freddie are being managed from a board standpoint today,” one source ⁣stated. Further fueling debate was a recent disagreement between PulteGroup‍ CEO ‌Ryan Pulte and Freddie Mac CEO‍ Michael Bessent, prompting questions about leadership and strategic‌ direction. “The ⁢question there would be, who takes the lead? Who’s got the pen ​that says this is the plan of ‍action for Fannie and Freddie?” asked attendee walker.

Beyond the GSEs, a critical ⁢shortage of buildable land is being cited as a major impediment to addressing the housing crisis. ​Adrian Foley,⁤ CEO of Brookfield Residential, ⁤asserted, “We don’t have a ‍housing crisis, we have​ a land crisis.” Builders are urging the Trump governance to expedite land ​entitlements, including opening up federal land and easing zoning restrictions.⁤ Foley proposed a “CHIPS Act for housing,” referencing the government’s investment in semiconductor manufacturing, in a recent CNBC interview.

Adding ‍to the industry’s‍ woes is a persistent ‌labor ‌shortage.‌ Doug Yearley, CEO‍ of Toll Brothers, emphasized that⁢ even with sufficient land, ⁢a lack of available workers would hinder construction.⁣ Smaller builders have reported labor losses due to fears of ICE raids, prompting calls for increased‍ training programs and a complete ⁢immigration ​policy. Yearley noted the ⁤diversity of the construction workforce, stating, “You⁢ go to any of our home ​sites, ⁣and it’s [like] the United Nations.”

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World

Mortgage Rates Fall Sharply Amid Fed Rate Cut Expectations

by Priya Shah – Business Editor
written by Priya Shah – Business Editor

Mortgage rates Plunge to Lowest ⁣Level since Late ‌2022 Amid Anticipation of Federal Reserve Rate cut

Mortgage rates ⁣experienced‌ a important decline Tuesday,⁤ driven by investor activity in teh mortgage-backed bond market as a ​Federal Reserve rate cut looms. ‌The average rate for a 30-year fixed mortgage fell 12​ basis points ⁣to 6.13%, reaching its lowest point since late 2022, according to Mortgage ​News Daily.

Matthew Graham, chief operating officer⁣ of Mortgage⁤ News Daily, noted the current market setup mirrors conditions seen in ‍September 2024, when ⁣rates similarly decreased ahead of a Fed meeting⁢ widely expected to result ‌in a rate cut. Though, he cautioned that ‌rates​ paradoxically ‌increased⁣ following ​the Fed’s ​rate cut last September, a scenario that could repeat itself,‌ though it is indeed not guaranteed.

The drop aligns with historical patterns, as ⁤explained by willy Walker,⁢ CEO of Walker &‌ Dunlop, in a recent‌ CNBC Property Play podcast. Analyzing Fed rate cut periods since 1980, Walker observed that cuts during recessionary environments typically lower long-term rates, including the 10-year and ‌5-year Treasury yields. Though, ​cuts⁤ outside of recessionary ⁢periods have less impact on long-term rates.

“If you go back ‍to 1980 and the nine Fed rate cut ‌periods over that 45-year period, the ones were the Fed cuts in a recessionary surroundings‌ end up pulling down‍ the long end of‌ the curve, pull down the 10-year,⁤ pull down the 5-year,” Walker ‌said. “In those where it’s not a recession, which is ​like right now, it⁣ does not impact long-term rates.”

Walker anticipates at least a 25 basis point cut,potentially followed ⁤by another,but believes the impact on long-term rates will be limited. ⁣He suggests a “buy on⁣ the rumor, sell on the news” dynamic, predicting a potential sell-off in the 10-year Treasury yield after ⁤the Fed’s announcement. “I think you probably see the 10-year sell off⁢ a little‍ bit after the Fed actually announces their 25 basis ​point cut,” Walker stated,⁤ adding that current yields ‍might potentially be lower than where thay will be in two to three weeks.

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