Inflation is supposed to be pretty high for the next 5-10 years with what's going on in the Ukraine and in China. Major resource dislocations are going to be common place, tho this may be an opportunity for the US to bring home manufacturing jobs and quit relying on globalism, which is dying on the vine. If the US can navigate the next decade, it may be in pretty good shape, but given the political non-leadership we've had since JFK, that's a big if.
2023 started off with some optimism because of an increase in housing activity. But lets push pause on the celebrations because the fundamentals point to more pain. Recent data have been stronger than anyone expected and in ways that will lead to tighter monetary policies by the FED, IE higher interest rates with a goal of putting the brakes on the economy.
Mortgage rates are taking off again in the last few days. We are back solid in the 7's for a 30 year fixed. Just a couple of weeks ago (10 days or so) we were starting to see high 5's %. Just as more Buyers were starting to look around again. The strong jobs report really kicked off the increase in mortgage rates and it's higher and higher every day as the markets price in another looming Fed rate hike. Along with a CPI report that shows slower than expected disinflation rates. I am on the side that believes there will not be a soft landing from this recession. Credit card debt is growing at an unsustainable level relative to income growth. That points to consumers being forced to retrench on that spending. And a day of reckoning.
The new home market is taking their medicine as builders discount prices and/or give away improvements or interest rate buydowns to sell inventory. That's why new homes are moving. Concessions. Resale market is hurt by lack of inventory of homes for sale. That and stubborn Sellers who yank properties off the market or let them sit without significant price drops. Foreclosures have increased but not in a significant way. The Fed is committed to crushing Housing and they are far from done. We are on track in 2023 to hit the lowest annual sales of homes since 2011. Anyway, that's my take : A tough 2nd quarter for the economy and more pain for real estate.
Inflation is supposed to be pretty high for the next 5-10 years with what's going on in the Ukraine and in China. Major resource dislocations are going to be common place, tho this may be an opportunity for the US to bring home manufacturing jobs and quit relying on globalism, which is dying on the vine. If the US can navigate the next decade, it may be in pretty good shape, but given the political non-leadership we've had since JFK, that's a big if.
The only thing slumping a bottom these days is Pete Buttigieg.
30% decline in comps might be a bottom
declines in existing home sales and mortgage applications are only milestones on the way to the bottom
signed,
a good friend of mine who once had eleven offices originating loans in south FL
in an attempt to monetize the Clinton's weaponization of Carter's CRA
lucky for him FL has a homesteading act on the books
2023 started off with some optimism because of an increase in housing activity. But lets push pause on the celebrations because the fundamentals point to more pain. Recent data have been stronger than anyone expected and in ways that will lead to tighter monetary policies by the FED, IE higher interest rates with a goal of putting the brakes on the economy.
Mortgage rates are taking off again in the last few days. We are back solid in the 7's for a 30 year fixed. Just a couple of weeks ago (10 days or so) we were starting to see high 5's %. Just as more Buyers were starting to look around again. The strong jobs report really kicked off the increase in mortgage rates and it's higher and higher every day as the markets price in another looming Fed rate hike. Along with a CPI report that shows slower than expected disinflation rates. I am on the side that believes there will not be a soft landing from this recession. Credit card debt is growing at an unsustainable level relative to income growth. That points to consumers being forced to retrench on that spending. And a day of reckoning.
The new home market is taking their medicine as builders discount prices and/or give away improvements or interest rate buydowns to sell inventory. That's why new homes are moving. Concessions. Resale market is hurt by lack of inventory of homes for sale. That and stubborn Sellers who yank properties off the market or let them sit without significant price drops. Foreclosures have increased but not in a significant way. The Fed is committed to crushing Housing and they are far from done. We are on track in 2023 to hit the lowest annual sales of homes since 2011. Anyway, that's my take : A tough 2nd quarter for the economy and more pain for real estate.