Back in the 30’s Toyota was a small family business making mechanical looms before Kiichiro Toyoda brought his vision for his father’s company into reality. That vision was a car company that employed a ‘just-in-time’ system which mitigated waste and excess part storage. It kept manufacturing lean and soon every car manufacturer (and other companies like IBM) in the world was following this model. In 2011 a huge earthquake and tsunami hit northeast Japan which caused a semiconductor supplier to go offline for many months, forcing Toyota to shut down production. Toyota adapted their ‘just-in-time’ model to hybridized model where they identified 1,400 ‘essential’ parts of the 25,000+ parts needed to make a car. They went all the way down the supply chain on these and made sure to have adequate stock of those parts and when the pandemic hit they had a 4 months’ supply of semiconductors and didn’t need to slash production.

Rates didn’t move this week after last week’s increase. Mortgage rates are facing pressure from economic reports of inflation and the Fed slowing down their quantitative easing program. Rates are up approximately 1/2% from this time last year.


Jobs – the number of people filing for unemployment remained unchanged from last week at post pandemic lows and near pre-pandemic levels.


New Construction – builder confidence is up 3 points from the previous month to 83 (anything over 50 is a growth market). This is the third consecutive month that builder confidence has increased. Single family starts are down 4% from last month and down 11% year over year. Single Family permits are up 2.7% from the previous month but down 6.3% year over year. This paints a picture for continued lack of supply in the near(ish) future which will support prices.

Inflation – Core Logic released their rent index (from July) showing that single family rents are up 8.5% year over year which is the fastest increase for 16.5 years. Rent growth for detached properties(11.1%) was double that of attached properties (5.4%). The Cass Freight Index showed freight rates are up 1.6% month over month and 36% year over year.

Mortgage Applications to purchases homes were up 2% from the previous week. Year over year purchases are down 6%. Refinances fell 5% from the previous week and are down 31% year over year.

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