Posted on 02/16/2023 6:23:12 AM PST by Kaiser8408a
I feel like I am in the film “Final Destination” but I can’t get off the aircraft.
First, US housing starts are now down -21.4% year-over-year (YoY) and down -4.5% month-over-month (MoM) in January 2023 as The Fed removes its massive monetary stimulus.
PPI Final Demand PRICES are still elevated at 6% YoY, so expect more Fed tightening.
Today’s data dump.
On a final note, I am appalled at the Biden Administration’s “response” to the East Palestine Ohio derailment. Where is Mayor Pete??
(Excerpt) Read more at confoundedinterest.net ...
A negative real Fed Funds rate is not “Fed Tightening”.
Stores are still raising prices quite often and by quite a lot.
Interest rates should be high enough (after lowest rate federal taxation on interest income) for CD holders to at least maintain their buying power.
If the older folks lose buying power, a recession is more likely.
One of the reasons the economy was weak under Obama was because of excessively low interest rates which caused older folks to lose buying power.
Luckily Florida is still red hot. Most people sell their homes up north for a million and buy a bigger home with cash for 450K and have plenty of money to live for awhile. Very smart.
My bank is not offering long-term CD 4%+ interest rate products. Banks apparently do not believe interest rates payable to CD depositors will remain above 4%. This suggests that house buyer interest rate buydowns by new house builders need not run for more than a couple of years. These buydowns could be funded by placing parts of the land purchase prices into escrow accounts.
Must read, later.
“Most people sell their homes up north for a million”
Only a small percentage of northern houses are worth over a million.
“a bigger home with cash for 450K”
Here in Sarasota County, $450K won’t get you a “bigger home” in much of the county.
“Mayor Pete”
Factories that use massive quantities of toxic chemicals should be adjacent the factories making those toxic chemicals.
Buying a house or renting an apartment is part of the cost of doing business as a working person.
Walmart might pay $3.10 instead of $2.40 for an item and does so in order to keep the item available for sale, upon which it sets a markup, part of which will be its profit.
Shops in Manhattan used to pay incredibly high rents.
To subsidize mortgage interest rate buydowns, house builders might partially pay its supplying landowners in special non-transferable zero-percent interest mortgage company bonds.
For a ten-year mortgage rate buydown of 3%, 30% of proposed house selling price might be in these bonds. For each year of interest rate buydown, a tenth of the bonds would be voided.
If the house gets refinanced by the buyers, the remaining bonds would get redeemed.
House prices went up here 66% over the last 2 years. They are nowhere close to giving back even a decent fraction of that massive price spike. A lot more air needs to come out of the balloon. Only then will I consider buying.
A guide to why housing is expensive in DeSantis’ “Freedom State” (and why Florida has homeless people):
https://www.orangecountyfl.net/Portals/0/resource%20library/permits%20-%20licenses/A%20Guide%20for%20Residential%20Plan%20Approval-CERT.pdf
I guess I should have been more specific. In the middle of the state near Orlando. You can still get a decent home for under 500K. The coast of Florida is more pricey in every way including homeowners insurance.
Sorry I moved from Glen oban in Arnold Maryland so I just thought it was like that everywhere.
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