What we’re reading (8/23)
“Goodbye Bathtub And Living Room. America’s Homes Are Shrinking.” (Wall Street Journal). “Home prices are near record highs, frustrating millions of potential buyers who feel priced out of the housing market. Home builders are having to find ways to make their product more affordable to increase their pool of customers. Shrinking the size of a new single-family home is an increasingly popular way to do it. Smaller homes can help cost-constrained buyers facing high mortgage rates. They also boost the bottom line for builders who are contending with spiraling labor and construction costs.”
“Housing Market Affordability Is Worse Now Than At The Height Of The Housing Bubble In 2006” (Fortune). “On Monday, the average 30-year fixed mortgage rate reached 7.48%, marking the highest level since the year 2000. Even prior to this recent surge in mortgage rates, housing affordability, as monitored by the Atlanta Fed, had already deteriorated beyond the levels seen at the housing bubble’s peak in 2006. Once this latest mortgage rate surge is factored in, August 2023 will become the worst month for housing affordability this century.”
“Wall Street Is Declaring Victory Too Early — The US Is Still Headed For A Recession” (Insider). “[J]ust because the economy's flight path seems gentle now doesn't mean that there won't be turbulence ahead. According to top Wall Street strategists and economists I've spoken with in recent weeks, there's plenty of evidence that a recession is on the way. In other words, bulls are declaring victory far too early.”
“Even Millionaires Are Feeling Financial Insecure, Report Finds” (CNBC). “Even doctors, lawyers and other highly paid professionals — also referred to as the ‘regular rich’ — who benefit from stable jobs, homeownership and a well-padded retirement savings account said they don’t feel well off at all. Some even said they feel poor, according to a recent survey conducted by Bloomberg.”
“What To Know About China’s Real Estate Crisis” (New York Times). “Major developers are faltering as they face huge losses, struggle with mountains of debt and miss payments to lenders. A long-running building boom that propelled China’s growth has come to a halt, threatening the jobs and savings of millions of households. China’s markets have tumbled and its currency has weakened as officials take action to spur growth.”
