Market Update 9.28.22

01  One common theme I am picking up reading all the articles that mention people who have put their home purchase on hold.....is that they have PAUSED the process, not stopped it. This is very important to note. This ALWAYS fuels buyer-build-up. The more people NOT buying homes now, the more the buyer-build-up of buyers who will buy later.

02  Nationwide, a record 33.9% of web search users looked to move from one metro to another in July and August, up from 32.6% in the 2nd quarter and about 26% before the pandemic. Miami was the most popular migration destination, followed by the two California metropolitan areas of Sacramento and San Diego.....which may reveal people are following the sun more than lower taxes? (Mansion)

 

03  Was GREEDflation a big component of the massive price escalations we saw in 2021/2022 Profits for companies in the S&P 500 were up 70% from 2020 — an expected rebound from the depressed earnings early in the pandemic — but they were 33% higher than in 2019, which was a pretty good year for corporate profits. ie: BECAUSE-YOU-CAN pricing - or greed - has fueled price surges notably.

 

04  Housing analyst Neal Hudson estimates UK house prices in July were overvalued by 17% compared to wages and mortgage rates. Buying homes in the UK with dollars is SMART! ($1.09 to the pound!!!)  And any UK-based homeowners in the US selling now may make a fortune simply via the exchange rate.(FT)

05 Crude Oil and Lumber prices slipped to levels seen in 2018 as the threat of global recession rises. Commodities dropped between 1-6% yesterday!  (Maybe good for construction costs?)

06  Home builder Lennar says sales remained strong in 9 areas, including New Jersey; Maryland; Virginia; Charlotte, N.C.; Indianapolis; San Diego, Calif.; and three markets of Florida: the southwest, the southeast, and the area around Palm Beach. Buyer pullback had been strongest in 7 markets, including Boise, Idaho, where prices skyrocketed earlier in the pandemic amid lower rates and the work-from-home housing boom. Others in this category include Philadelphia; Pensacola, Fla.; Austin; Reno, Nev.; Minnesota; and Utah. (BARRONS)

 

07  Higher US interest rates have bolstered the dollar, exacerbating inflation elsewhere by raising the cost of commodities which are, more often than not, priced in dollars. So while commodity prices are down off their crazy-high's earlier this year making building cheaper in the US, the price to build outside the US is waaaaaay up. (FT)

 

08  The U.S. housing market slowed for a seventh straight month in August, the longest stretch of declining sales since 2007, as higher mortgage rates continued to undercut buyer demand. Home sales look poised to decline further in the coming months, economists say, as mortgage rates recently topped 6% for the first time since 2008, when the U.S. was in a recession. The Fed hiked rates 0.75% yesterday. Many first-time buyers have been priced out of the market, and existing homeowners are opting to stay put rather than give up their current low rates. The seasonally adjusted home sales rate is down to 4.8 million .....but that's close to the exact number in January 2019. (WSJ) 

 

09  Mortgage demand surged 3.8%, up for the first time in 6 weeks. The average 30-year fixed rate mortgage is DOUBLE that of a year ago, the fastest hike ever. Mortgage applications rose 1% but are down 30% compared to a year ago. Most believe rates are going up and staying up. (CNBC)