1 big thing: Puerto Rico's intersecting crises

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2. Catch up quick

3. China's wealth surge

4. How countries differ

5. Global inequality declines

6. America's poor see improvements

🎉 Happy Friday, and shana tova to those of you observing the holiday that begins Sunday night. But first, some news about the global state of wealth inequality — and more. Let's go!

Today's newsletter is 967 words, 4 minutes.

Today's newsletter was edited by Kate Marino and copy edited by Mickey Meece.

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Stay on top of the latest market trends and economic insights

Axios Markets

1 big thing: Let's talk about "growth stocks"

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2. Charted: Lost lead

3. Catch up quick

4. Yields are still rising

5. What's happening to your beer supply 

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👋 Hey there. Nice shirt! Is that new? Here's your newsletter at 941 words, 4 minutes. Let's get to it. 

🎧 1 thing Emily is listening to: A new episode of "Serial" season 1 just dropped this morning!! 

That's because Adnan Syed, the subject of the original 2014 series that got the world obsessed with podcasts, was freed from prison yesterday. "Serial" host Sarah Koenig was at the courthouse yesterday and recorded an update.  

So, uh, gotta go. See you back here tomorrow.

1 big thing: Hard times in real estate

2. Charted: Rise of the little guys

4. Charted: German price shock 

5. What to watch: Bank CEOs in Washington

📚 Welcome back. We'll keep it short. Today we're extra-inspired by "Smart Brevity," the book by Axios' founders just out yesterday that will help you write like us. It's already a top seller on Amazon.

🚨Situational awareness: The 30-year-mortgage rate just hit 6.25%, up nearly a quarter-point from last week, per the Mortgage Bankers Association's report out this morning.  

Today's newsletter is 1,003 words, 4 minutes.

1 big thing: Balance sheet fright

3. Rents are maybe peaking

4. Home sales are slumping

5. Bank CEOs in the hot seat 

🌅 Good morning! It's the fall equinox. But other measures are less in balance. You'll see.

Today's newsletter is 1,066 words, 4 minutes.

1 big thing: The high-stakes economics of paid leave

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2. Charted: Sick leave around the world

4. Adobe's $20 billion antitrust test 

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5. Box stocks fold 

👑 Monday. Much of the world has eyes on London this morning, where Queen Elizabeth's funeral is just getting underway. It's the first state funeral since Winston Churchill's, says AP.

But the rest of today's newsletter dispenses with royalty to bring you news on the labor market, software deals and box stocks.

Today's newsletter is 1,028 words, 1,052 words, 4 minutes.

This newsletter was edited by Kate Marino and copy edited by Mickey Meece.

More homebuyers are paying cash and avoiding taking out mortgages, in what could be a longer-term structural change for the real estate market.

What's happening: About a third of all homebuyers in July paid cash.

That's down slightly from a peak earlier this year but still much higher than both pre-pandemic times and all of the 2021 buying frenzy, according to a Redfin analysis of county records across 41 of the biggest metro areas.

The big picture: There are a few reasons cash buyers make up a larger share of the market, Redfin deputy chief economist Taylor Marr tells Axios.  

Competition: The competitive housing market favors cash buyers who are more likely to win in a bidding war for a home over mortgage borrowers. 

Remote work arbitrage: In the remote work landscape, well-paid workers moved out of pricey areas to more affordable regions and they paid for homes with cash. This phenomenon has slowed but is still going on.

Investors: There are more investors in the market now. And even as the homebuying market for individuals cools — with average 30-year mortgage rates now at more than 6% — investors continue to buy homes to rent out in a still-hot rental market. Three-quarters of investor purchases are made with cash, according to Redfin.

Meanwhile, more buyers are paying cash for second-home purchases because of moves the Biden administration has made to encourage more lending to first-time buyers. Lending to second homebuyers can often crowd out other borrowers.

Back in April, housing regulators increased the fees on second-home loans fairly significantly with that aim in mind. 

The move pushed some vacation homebuyers to turn to cash or alternative financing, like tapping an existing home equity line of credit and using that cash to pay for another house.

More home buyers are paying in cash

About a third of all home buyers in July avoided taking out a mortgage.

Real estate

More homebuyers are paying cash and avoiding taking out mortgages, in what could be a longer-term structural change for the real estate market.What&#x27;s happening: About a third of all homebuyers in July paid cash.<ul><li>That&#x27;s down slightly from a peak earlier this year but still much higher than both pre-pandemic times and all of the 2021 buying frenzy, according to a Redfin analysis of county records across 41 of the biggest metro areas.</li></ul>

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Data: Mortgage Bankers Association; Note: Adjusted to August 2022 dollars; Chart: Kavya Beheraj/Axios

After getting laid off from her job at mortgage provider Better.com in March, Charmaine Steele interviewed at eight other mortgage companies. Each one subsequently announced layoffs of their own, she tells Axios. At least one has gone out of business.

Why it matters: It's lean times in the real estate business. The slowdown is a warning for the economy more broadly, and a rare labor market weak spot at a time of strong overall employment.

With interest rates hitting 14-year-highs, and lending activity way down from the peaks of the past two years, layoffs and shutdowns are happening with alarming frequency.

"The housing market tends to lead the broader economy both into and out of recessions," Mike Fratantoni, chief economist at the Mortgage Bankers Association, tells Axios.

It was a grim job search, says the 30-year-old Steele, who lives in Charlotte, North Carolina. "Nobody was hiring anybody."

State of play: On Tuesday, real estate brokerage Compass announced the second round of layoffs. Just the day before, Opendoor — which is in the business of buying and flipping houses — announced it lost money on 42% of its transactions in August.

Steele's former employer Better.com has done four rounds of headcount cuts, including the famously botched mass layoff via Zoom in December 2021, Tech Crunch reported. 

Real estate company Redfin laid off 8% of its staff in June.

Rocket, one of the largest non-bank mortgage lenders, has done two rounds of cuts. Briefly a meme stock in 2021 when it traded at over $25, Rocket is now at less than $8.

Small fintechs in the mortgage space, like Reali, closed up shop. Sprout, a mortgage company, also went out of business. First Guaranty Mortgage Corp. filed for Chapter 11.   

By the numbers: "Mortgage banking and brokerage shops trimmed 3,600 full-timers from their payrolls in July," reports Inside Mortgage Finance, citing the most recent BLS data. "Hardly anyone is immune. If a lender isn't cutting staff, it's offering early buyout packages."

Catch up fast: Mortgage companies hired like crazy over the past couple of years, as low-interest rates drove a surge in refinancing. For a while, things were great for workers in the industry — some companies were paying seven-figure signing bonuses, Fratantoni told MarketWatch recently. (A spokesman for the MBA confirmed the eye-popping number with Axios Tuesday.)

Steele says she was earning around six figures at Better.com, her first job at a lender after working as a real estate agent. She's now working in the small business lending space, making 50% less.

The bottom line: For those getting financial crisis flashbacks, this is different. Two-thirds of the mortgage business is now the province of small non-bank lenders — and Fratantoni estimates there are 4,500 companies in the space.

Though banks have made cuts to their mortgage businesses, too, in recent months, they're much less exposed to housing overall.

And there's far less likelihood of the kind of systemic spillover we saw nearly two decades ago. Improved underwriting standards mean borrowers have better credit (foreclosure rates are still low), and most of them have mortgages with rates under 5%.

Editor's note: This story was corrected to show the Redfin layoffs happened in June, not August.

Layoffs, shutdowns hit mortgage industry as high rates crush lending

The slowdown is a rare labor market weak spot at a time of strong overall employment.

Mortgages

Rents could finally be peaking

New data shows average rents declined in August for the first time in nearly a year.

Inflation

See how the line in the chart ticks down a little smidge on the right? That&#x27;s a clue that after more than a year of massive increases, rent growth in the U.S. is moderating.Why it matters: Housing costs, including skyrocketing rent prices, are a <a class="gtmContentClick" data-vars-link-text="major driver" data-vars-click-url="https://www.axios.com/2022/09/14/housing-costs-inflation-cpi" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/14/housing-costs-inflation-cpi" target="_self">major driver</a> of inflation.

Work-life policies like paid sick and medical leave, as well as reasonable hours and scheduling, are becoming a more high-stakes economic issue, as in-person workers exercise their increased leverage in a tight labor market — and cope with more than two years of working on the front lines of a pandemic.  

Driving the news: A fight over paid sick leave and working conditions almost brought the country's economy to a standstill last week. Railway workers, who say they don't have easy access to paid sick time, were ready to strike if their employers wouldn't improve working conditions.   

These issues make up the human side of the supply chain, which proved fragile in the crisis. 

"These are human beings, you know, they're not machines," says Sharita Gruberg, a vice-president at the National Partnership for Women and Families.

Background: The railroad companies, in an effort to keep costs down and profits up, instituted a restrictive policy requiring employees to be on call more often, and penalizing them with a point-based system for taking unscheduled time off, the New York Times reported.   

Rail workers didn't get any paid sick time, they said. 

During the supply chain crisis, when business picked up, the harsh policies "pushed workers to the limits of their physical and mental health," per the NYT.

The tentative agreement reached last week gives railroad workers unpaid time off for medical care and illness, and sets a key precedent for the unions in bargaining for leave — something they hadn't done before.

Meanwhile: Workers in many fields are more willing to strike, demanding better pay and — crucially — improved conditions, the Wall Street Journal reports, noting that it reflects how the pandemic has reshaped jobs and attitudes about work.

In Minnesota last week, 15,000 nurses walked off the job over stalled contract negotiations. Nurses say they're burned out after three years of working in a pandemic.

Mental-health workers are on strike in California and Hawaii, and nursing home workers in Pennsylvania just wrapped up a strike last week, too, earning better pay and better nurse-to-patient ratios, the WSJ reports. 

Zoom out: The U.S. doesn't require employers to provide paid time off for illness; in other well-off nations, it's commonplace. 

While 94% of high-income workers in the U.S. have paid sick leave, only 53% of those in the lowest quartile of earners have access, according to 2021 data from the Bureau of Labor Statistics.

More than half of workers at the nation's largest retailers and fast-food chains said they don't have access to paid sick leave in a 2020 survey.

Efforts to pass paid leave at a national level failed during the pandemic, surprising advocates who believed COVID would push lawmakers to act.

Between the lines: 15 states and some cities do have sick leave policies in place.

But even when employers have sick leave on paper, it doesn't always translate in practice. 

Workplace policies can be structured in such a way to make it nearly impossible for someone to just stay home from in-person work — onerous rules around doctor notes or finding someone to fill the shift can keep folks from calling out. 

Work-life policies are increasingly high-stakes economics

A fight over paid sick leave and working conditions almost brought the country's rail network to a standstill last week

Paid leave

An illustration of scales with railroad crossing lights blinking

Work-life policies like paid sick and medical leave, as well as reasonable hours and scheduling, are becoming a more high-stakes economic issue, as in-person workers exercise their increased leverage in a tight labor market — and cope with more than two years of working on the front lines of a pandemic. Driving the news: A fight over paid sick leave and working conditions almost brought the country&#x27;s economy to a standstill last week. Railway workers, who say they don&#x27;t have easy access to paid sick time, were <a class="gtmContentClick" data-vars-link-text="ready to strike" data-vars-click-url="https://www.axios.com/2022/09/13/with-rail-strike-looming-two-unions-are-holding-out" data-vars-content-id="b3b2946e-8633-4d6c-b990-3643473824c8" data-vars-headline="Work-life policies are increasingly high-stakes economics" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/13/with-rail-strike-looming-two-unions-are-holding-out" target="_self">ready to strike</a> if their employers wouldn&#x27;t improve working conditions.

Speaking in the Rose Garden on Thursday, President Biden thanked the negotiators who brokered a last-minute deal averting a railroad strike that would have crippled the nation's still recovering supply chains.

Why it matters: Biden's handling of the negotiations between the rail companies and their unions marked a pivotal moment for the administration, which had to balance its pro-labor stance with the need to avoid an economically disastrous strike ahead of the midterms.

"Together we reached an agreement that will keep our critical rail system working and avoid disruptions of our economy."

"Today is a win," he said. "This agreement is validation of what I've always believed — unions and management can work together." 

As he returned to the Oval Office, he answered a shouted question about grocery prices being up more than 13 percent this year. "Rail's moving and it's not going to go up," Biden replied.

Catch up quick: Biden himself got involved in the talks, making a "crucial call" to the negotiating parties last night at around 9 p.m., according to a source familiar with the situation.

Negotiations in Washington went on for 20 straight hours on Wednesday, the president said. "The negotiators here today I don't think they've been to bed yet."

The key sticking point for the holdout unions had been sick leave, something that reportedly struck a nerve with the president, the Washington Post reports.

"Biden had grown animated in recent days about the lack of scheduling flexibility for workers, expressing a mixture of confusion and anger that management was refusing to budge on that point," the paper reports.

What's next: The 12 railroad worker unions need to vote to approve the tentative deal, which includes a provision for some unpaid time off for workers who need routine or preventative medical care, according to a statement from one of the unions. 

The deal sets an important precedent for these unions, which have historically not bargained for leave at this level of negotiations.

Yes, but: The deal does not eliminate a scheduling system put in place by the railroad companies, called Hi-Viz, which workers have said is particularly grueling. And the agreement only provides union members with a single paid sick day.

Biden declares tentative rail agreement a "win"

President Biden shakes hands with Secretary of Labor Marty Walsh after speaking about the railway labor agreement on Sept. 15. Also pictured (left to right): Deputy Secretary of Labor Julie Su, OMB Made in America Director Celeste Drake, and Director of the National Economic Council Brian Deese. Photo: Jim Watson/AFP via Getty Images

Rail transport

Transportation

Speaking in the Rose Garden on Thursday, President Biden thanked the negotiators who brokered a <a class="gtmContentClick" data-vars-link-text="last-minute deal" data-vars-click-url="https://www.axios.com/2022/09/15/biden-rail-strike-labor-deal" data-vars-content-id="b5734539-1be8-4aa6-857d-0a079271face" data-vars-headline="Biden declares tentative rail agreement a &quot;win&quot;" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/15/biden-rail-strike-labor-deal" target="_self">last-minute deal</a> averting a railroad strike that would have crippled the nation&#x27;s still recovering supply chains.Why it matters: Biden&#x27;s handling of the negotiations between the rail companies and their unions marked a pivotal moment for the administration, which had to balance its pro-labor stance with the need to avoid an economically disastrous strike ahead of the midterms.

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

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Stories

Rents could finally be peaking

Layoffs, shutdowns hit mortgage industry as high rates crush lending

Work-life policies are increasingly high-stakes economics

More home buyers are paying in cash

Biden declares tentative rail agreement a "win"

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🔌 Puerto Rico's financial crisis

😱 Quantitative frightening

🏡 Mortgage mess

📉 Growth stocks collapse

✨ High-stakes benefits