A U.S. Housing Update

It’s no secret that the housing market is in bad shape. Higher interest rates and record-high prices have crushed the demand side of the equation, and supply remains tight.

With that said, we got some additional data today so let’s take a look… 👀

First is the S&P CoreLogic Case Shiller national home price index. It dropped for the third straight month in September (-0.80%), with YoY price growth slowing to +10.80%. While the yearly change is still very high, seeing prices cool for several consecutive months is a positive sign for the Fed, which has been trying to bring prices down. 🧊

Meanwhile, Fannie Mae and Freddie Mac will raise the limits of government-backed loans to a new record level in 2023. The maximum loan limit in some high-cost areas will be over $1 million. Some argue that this does nothing to solve the real driver of the housing crisis, record-high prices, and simply allows borrowers to take on more debt than they might be able to handle.

Last week existing home sales fell for the ninth straight month, dropping 5.80% MoM and 28.4% YoY. The median price of an existing sold home was $379,100, a 6.60% increase YoY. 🏘️

So while it’s not happening quickly at the national level, the Fed’s tightening is having a slow but steady effect on housing. Certain markets that boomed during the pandemic have seen significant drops as some froth comes out of the system. And others are simply leveling off as demand dries up.

Lastly, Bank of America’s CEO is predicting two years of pain ahead for the housing market before activity returns to normal. 🔮

Tomorrow we’ll hear October’s pending home sales data, which will give us another piece of the puzzle. But overall, housing continues to correct to the downside. 📉

Learn More About...

More in   Economy

View All

The Biggest Loss In 116 Years

If you thought your portfolio had a bad year in 2022, wait until you hear about the Swiss National Bank. 🙈

Based on its preliminary figures, it’s anticipating a 132 billion Swiss franc loss. That represents the largest loss in the central bank’s 116-year history and is about 18% of the country’s gross domestic product (GDP). This compares to the bank’s 26 billion franc profit in 2021.

Read It

Details From Davos

The World Economic Forum (WEF) annual meeting took place in Davos this week, and the world’s elite discussed many topics. However, across the board, there were a few key themes that kept coming up.

Let’s recap what those were. 📰

Read It

Officials Weigh In On The Economy

Federal Reserve Chairman Jerome Powell delivered a speech to Sweden’s Riksbank on Tuesday, emphasizing the need to be free of political influence. 💬

He’s been consistent in his messaging that the Fed needs to tackle high inflation. However, he reiterated in today’s message that achieving the central bank’s goal will require “tough decisions” that are likely to be politically unpopular.

Read It