Inflation Update, Housing Starts, Retail Sales
Mortgage Rates – the price of Mortgaged Backed Securities (MBS) continued their decline this week in response to higher than anticipated inflation reports. Mortgage rates are up by 0.5% from this time last year. Inflation – the Producer Price Index (PPI), which measures wholesale or producer inflation, rose 0.3% in January. Year over year inflation […]
Superbowl Spending, Contrarian Investing, Long Term Value
Increased Super Bowl Spending - 100M People are expected to watch the Super Bowl and the average fan is expected to spend $43 on food – up 23% from last year. Wages are now up more on a year over year basis than inflation and food prices have moderated. Wings prices have fallen for the second […]
Maritime Salvage Rights, Home Values Improve
Salvage Law – at 1 a.m. on the morning of November 15th, 1994, Captain ‘Skip’ – a sailor since the age of 5, answered a distress call. He successfully maneuvered a 688 foot oil tanker carrying 10M gallons of heavy fuel oil near shallow water close enough to rescue tow a tugboat and barge. Once […]
Feeding Everyone, Inflation Mellows, Pending Sales Increase
Global Food Economics: How to feed 8 Billion People – in her new book Hannah Ritchie investigates how to feed 8-10B people without destroying the planet. Currently 10% of the global population is undernourished or 800M people (2.5X the US Population). Looking at caloric production, global farms produce the equivalent of 5,000 calories per person […]
Algorithmic Cartel, Inflation Mellow, Values Improve
Rents – a lawsuit against Texas-based company RealPage is putting increased attention on how algorithms influence the rental market. In this lawsuit, RealPage is accused of facilitating a cartel between major property manager which results in higher prices for renters and higher profits for landlords. In 40 markets in the US RealPage controls anywhere from […]
Disinflation, Jobs Update, Loans Perform
What a pot of gumbo can teach us about disinflation – while the CPI Index is a good measuring stick for the overall economy, a pot of gumbo has specific ingredients from different regions of the U.S. and can shed insight on ‘disinflation.’ Inflation causes prices go up; deflation causes prices go down. Disinflation means prices […]
Corporate Zombies, Current and Future Home Values
Why Corporate Bankruptcies rose in 2023 – According to S&P Global Intelligence there were 591 corporate bankruptcies in 2023, which is the highest number since 2011 if you remove the notable Covid outlier of 2020. Many of these bankruptcies were Chapter 11 which is aimed at restructuring a firm and not totally shutting down (something […]
Happy Holidays, Inflation Slows, Rents Steady
Wishing everyone longevity, fortune, good food, and time with the family over the holidays! Mortgage Rates – remained unchanged this week as the price of Mortgaged Backed Securities had a remarkably stable week. Rates are at the best levels we have seen since June and are up about 0.5% from this time last year. Inflation – […]
Fed Rate Inertia, Shipping Slows Inflation Flat
The Physics Behind Interest Rate Cuts – The Fed finished its 8th and final interest rate decision of 2023 this week. As predicted, they left rates unchanged and projected as many as 3 cuts next year. While the Fed did not clue us in to when exactly these cuts will take place, we can infer […]
Loan Limit Increases (old news), Equity Improves, Used Car Prices Decline
Loan Limits – 2 weeks ago conventional loan limit increases were announced for 2024 and increased by 5.5%. This means in the Portland market you can now purchase a $790,000 home with $23,700 down if it is a primary residence and you are a first-time homebuyer. It also means that you could buy a $1,550,000 […]