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Market Snapshot 11.10.22- Where We Go From Here

Good Thursday AM,

Let’s see where we go from here.

CPI came in lower than expected. Bonds took off (stocks did as well). The 10-yr has dropped to 3.85% from 4.13’s close yesterday 😊. Mortgage bonds up 100+ basis points. Rates down .375%. We need some follow through, so we don’t give back these gains. A few rally days in a row could get the news out to buyers to buy the dip. The Dow has recovered today so that the yearly loss is trimmed to 7%. Think about that for a moment. All of the erratic moves and all of the monster drops have amounted to only a 7% loss year to date. The Fed’s favorite inflation guide is PCE, which comes out next week. It largely follows CPI in trend, but the data is calculated differently. It should come in lower as well.

Keeping fingers and toes crossed no one says anything stupid from here.

I thought the below chart was interesting. Why people moved…

This week’s MBA Chart of the Week shows the reasons for leaving one’s previous residence. The three main reasons in the 2021 AHS are wanting a larger or better-quality home (17.7%), wanting a more desirable neighborhood (15.6%), and forming their own household (14.4%). In the 2019 AHS, the same top three reasons were given with similar results (16.6%, 15.3%, and 13.8%, respectively). The category with the largest drop from 2019 to 2021 was “new job or job transfer,” which fell from 7.5% to 6.4%.

Comparing the 2021 and 2019 AHS data, highlights include:

  • Of the 128.5 million households in the 2021 data, 35.4 million (27.5%) had at least one member who moved during the past two years. This compares to 27.7% in the 2019 AHS.
  • Of the respondents who reported a household member moving during the past two years, 20.3% moved more than 50 miles in the 2021 data versus 19.9% in the 2019 data.
  • For respondents who reported a household member moving during the past two years and whose previous residence was a house, an apartment, or a manufactured/mobile home, 32.5% moved from an owner-occupied unit in the 2021 AHS versus 31.5% in the 2019 data.

Last, tough to manage real estate by analytics, not by boots on the ground.

Real-estate company Redfin Corp. laid off 13% of its staff on Wednesday and closed its home-flipping unit, saying the operation was both too expensive and too risky to continue. The closure of Redfin’s home-flipping business, RedfinNow, follows Opendoor Technologies Inc. posting record losses last week. The biggest home-flipping company sold too many homes for less than their purchase price. Opendoor blamed the pace of rising interest rates for throttling the housing market faster than the company could predict.

Please remain safe and stay healthy, make today great!