Smart Investing with Brent & Chase Wilsey
Business:Investing
Annual Home Sales
The higher interest rates have put a damper on home sales, which is no surprise. The seasonally adjusted annual sales came in at 3.8 million for October. Not only is that a decline of 4.1% from September, it is the lowest seasonally adjusted annual home sales since August 2010 which was over 13 years ago. As interest rates pull back somewhat going forward, we could see some better homes sales but I do not believe we’ll see any type of boom that will cause home prices to increase substantially.
Delinquencies
You may be hearing about the increase in delinquencies for Americans, but at the end of September just 3% of outstanding debt was in some stage of delinquency. What you won’t hear is back in 2009 delinquency rates hit a record 12% and going back to a more normal economy in 2019, delinquency rates were 4.7%. Here is another fact for you that shows things are not as bad as the media wants you to believe. As a whole, consumers used an average of only 24.1% of their credit card allowance which is still below 2019 when it was 24.6% of the outstanding allowance.
Core PCE
The Fed’s preferred measure known as core PCE rose just 3.5% year over year in the month of October, which was down from 3.7% in September and marked the lowest reading since April 2021. Core PCE excludes food and energy from the headline number. If we look at headline PCE, it was even more impressive due to lower energy prices as it rose just 3% compared to last year, which was down from 3.4% in September. This report is further evidence that inflation is continuing to decelerate and reinforces my belief that the Fed’s interest rate hiking cycle has ended.
Real Estate Market
Just how strange is the current real estate market? Pending home sales, which looks at signed contracts in the month of October dropped 8.5% compared to last year and registered the lowest reading since the National Association of Realtors began tracking them in 2001. This means that home sales are worse now than the Great Recession in 2008/2009. The main issues in the month were high interest rates, which shot above 8% in the month and the limited amount of supply. Given the wild swing in interest rates, I still believe it will take a few years for the real estate market to normalize.
April 27, 2024 | GDP, Personal Consumption Expenditures (PCE), S&P 500, Technology & S&P 500, Nasdaq and Do you Hold too Much Cash?
April 20, 2024 | Retail Sales, Value Companies, Home Owners Insurance and Pensions & Social Security
April 13, 2024 | March CPI, March PPI, Investing High & Lows, Semiconductor Industry and Reinvesting Dividends
April 6, 2024 | March Jobs Market, JOLTs, Stock Market, Office Rents,
March 30, 2024 | EV Sales, History of Hype Investing, PCE, Roth IRA 5-Year Rules
March 23, 2024 | Apple Lawsuits, Retirement Assets, Investing and Mortgage Points & Lender Credits
March 16, 2024 | CPI, PPI, 401k, Bitcoin Peaking Point and Tax Brackets vs Your Tax Rate
March 9, 2024 | Labor Market, JOLTs Report, China, Personal Consumption Expenditures and Social Security Changes Coming?
March 2, 2024 | 401k Loans, Hype Investing, US Farmland and is Long-Term Care Insurance Worth it
February 24, 2024 | Commercial Real Estate, Should You Buy Nvidia Now, Chinese Car Makers and Investment Return of Annuities
February 17, 2024 | AI Outlook, Investing in Technology, CPI, PPI and Health Insurance Before Medicare
February 10, 2024 | CPI, China Owning U.S. Debt, Growth Companies and Understanding your Tax Phases
February 3, 2024 | Employment Situation, Job Openings, Investment Grade Debt, Liquid Cash and Tax Filing Review
January 27, 2024 | GDP Report, PCE, Interest Rates, Federal Reserve Balance Sheets and Rule Changes for Inherited IRAs
January 20, 2024 | Banks & the Economy, Office Space, Consumer Spending and Taxes when Selling a Home
January 13, 2024 | Inflation Numbers, PPI, REITs, Bitcoin ETF and Social Security Spousal Benefits
January 6, 2024 | Jobs Report, JOLTs, Dividends & Buybacks, Federal Debt and Structuring Income for 2024
December 29, 2023 | Santa Claus Rally, Cryptocurrencies, Banks and the Magnificent Seven
December 16, 2023 | CPI, Government Debt, Apple, Accident Repair, Season of Giving
December 9, 2023 | Employment, JOLTs Report, Drug Companies, Magnificent Seven and Reviewing Income
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