1. Yeah, the continued strength in the stock market has surprised me.
2. Currently looking to buy a house. Been watching the market for a long time. Sellers are still listing based on selling prices from a year+ ago when interest rates were low 3's / high 2's, not the mid to upper 6% range where they were recently. So their houses sit. If we had normal inventory levels, house prices would be under more pressure, I think. I have noticed that the flippers are largely gone, as are the people who expect a 10% per year (or more) ROI for merely living in their house for 2-5 years and consuming the useful life of the roof, HVAC, and appliances.
I watch the real estate market very closely. There is a serious lack of "starter" homes in most markets. The higher-end market may be prone to a greater contraction than the lower-end due to inventory issues and available buyers. This may change if home builders begin to key in on lower-end homes and boost the inventory.
Alan,
Are you saying the rate hike looks like an error because they should've raised a half point? Can you clarify why you think JPOW made a mistake?
A few reasons I think JPOW could have gone a half point:
1) we are within 14% of the all-time high in the S&P500, meaning there has been no stock market crash
2) housing prices have not receded in a material manner
3) we are still 6%+ CPI
4) tight labor is leading to high wage growth, wage growth (just like fuel costs) causes everything to rise in cost
5) commodity prices aren't done going up as no real investment in the space has taken place
Add points 4 & 5 together and we are quickly staring at another wave of inflation.
However, I think the market signaled that it wanted 25bps and Powell gave it to them, good and hard.
1. Yeah, the continued strength in the stock market has surprised me.
2. Currently looking to buy a house. Been watching the market for a long time. Sellers are still listing based on selling prices from a year+ ago when interest rates were low 3's / high 2's, not the mid to upper 6% range where they were recently. So their houses sit. If we had normal inventory levels, house prices would be under more pressure, I think. I have noticed that the flippers are largely gone, as are the people who expect a 10% per year (or more) ROI for merely living in their house for 2-5 years and consuming the useful life of the roof, HVAC, and appliances.
Thanks!
I watch the real estate market very closely. There is a serious lack of "starter" homes in most markets. The higher-end market may be prone to a greater contraction than the lower-end due to inventory issues and available buyers. This may change if home builders begin to key in on lower-end homes and boost the inventory.
"The Saudi’s are now open to selling oil in other currencies"
Cue the next regime change operation....