Final Friday is here and Scoops prepared a note of economic news and data to give you some guidance on the economy with a bias towards the real estate industry. What a turbulent time yet economists are optimistic there will be no global recession. Great news! Let’s read about this weeks news:
New home sales are up 20% this year over last year. Substantial as the real estate for existing home inventory are at lows. Inventory is the key and not rates.
Existing home sale prices are hitting record highs up .7% from the previous month and inventory is down 25% from last year at this time, year over year.
Speaking of rates the Fed will be meeting soon and are expected to raise rates by .25%. Mortgage rates have already priced the hike into their portfolios. This will be 10 months in a row of hikes.
A banking executive feels the time is ripe for banking mergers and acquisitions. Quoted, a mid-size bank must get bigger to stay in the game. Little banks would not be effected he said. Truly, its been a while since we had the merger and acquisition craze, not including the banking crisis as banks were forced to merge etc by the treasury.
Prices of goods only increased by 2% last month, which was lower than expected. The inflation meter generally is 4% and above from the previous month of price increases to be flagged as “inflationary”.
Great news from the motor city capital of the world, Detroit. GM has hit record highs and Ford is not far from record highs. Both have hit their strides in great technology and quality. Their EV divisions are doing well. Also, GM is spending almost a billion dollars in diesel technology at their plant in Ohio and Toyota will be producing hydrogen trucks. Consequently, there is no clear winner in the race to develop alternative fuels for motors as we have conventional gas, electric, diesel, and now hydrogen. May take years to conclude which fuel “wins” but the winner will reshape the automotive world.
What does Scoops see in the horizon? Based on strong employment and job growth the desire to purchase homes will not drop anytime soon. Rates are not holding back buyers and there are plenty of cash buyers in the market. A rate hike this month is a given and I think that there is a good chance of another hike in August of a .25%. Let’s see where this takes us.
I hope you have a great weekend! Feel free to contact me at johngouley@gmail.com.