Functional & Psychological Obsolescence

Originally Published 3/29/19

Planned & Psychological Obsolescence, Rates Improve, Inflation Tepid

This Planet Money Podcast explores how planned obsolescence brightened lightbulb sales and psychological obsolescence helped drive auto sales (advertisement for next year’s shinier model in the glovebox). I’m curious how often psychological obsolescence motivates real estate purchases versus functional obsolescence (need more beds, baths, garage, etc.)

Rates – improve marginally this week after a big drop last week that put mortgage rates and the 10 Year US Treasury note at 15 month lows. 

New Home Sales – were up almost 5% in February, reaching an 11 month high. 

Inflation – The Producer Price Index, which is the Fed’s favorite gage of inflation, decreased 0.4% to 1.4% in January. This is good news for borrowers as inflation is the arch nemesis of mortgage rates. 

Jobs – the number of people filing for unemployment for the first time continued its downward trend. 

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