FED Holds Steady

[J Grant]

That may have been true back in 2021 and 22. No one cared about prices nationwide with those low interest rates.

Now.... the market is acutely aware and affected by the home prices here in SoCal. They have more choices now. Stubborn sellers just don't want to face the fact that home prices are now trending downward and they have to do price reductions or give concessions if they want to sell. Especially properties that need remodeling or upgrading.

Couple that with economic uncertainty and you have properties sitting with extended days on market. Those to the Moon housing prices couldn't last forever. There's nowhere for those prices to go but down. Same with the stock market. Something's got to give...

Seeing the same thing here in FL_ things are selling, but only after a price reduction and or concession, unless the property is very special or highly remodeled.

Those ugly c 4 properties that sold for top $ in 2022 - those people are upside down now relative to what they paid - if their mortage rate is low enough they may not care today, but if they ever try to sell they may face the omg I have no equity realiztion and they can not take out a line of credit or small loan if needed - no equity or upside down in mortgage is a thing.

 

[Non Sequitur]

Too much money was printed since 2020, lowering interest rates will not cure what ails the housing market. Housing affordability has outpaced income by a wide margin due to inflation, utility costs, taxes, and insurance.

 

[Fernando]

CEO Zillow Wacksman noted that if the housing industry had continued to build new properties to keep up with buyer demand, it may not have become the 'crisis' it is today.

'We have been chronically under-building since, really, the global financial crisis,' he said. 'Less supply and a lot of demand is going to keep home prices elevated.'

 

[Digger88]

JP Morgan admits Trump was right and expects five rate cuts by the end of the year

 

[James Mpls]

IMO we won't see a rate drop until early next year, and possibly not until after Powel is out in May 26.

Nope. 25-50 basis point cut and dovish pivot by sir Jerome at Jackson Hole….the jobs market (even if some stats do not bear it out) is falling apart. ALL knowledge based jobs are steadily being replaced with AI. Period. Cut will happen in September. The boomer economy, metrics, bonds, etc are all finished. The system is completely imploding upon itself. The social security Ponzi scheme is done. Worldwide debt is unpayable, birth rates are at catastrophic lows, pensions are f***ed. The Fourth Turning is upon us.

 

[Non Sequitur]

Nope. 25-50 basis point cut and dovish pivot by sir Jerome at Jackson Hole….the jobs market (even if some stats do not bear it out) is falling apart. ALL knowledge based jobs are steadily being replaced with AI. Period. Cut will happen in September. The boomer economy, metrics, bonds, etc are all finished. The system is completely imploding upon itself. The social security Ponzi scheme is done. Worldwide debt is unpayable, birth rates are at catastrophic lows, pensions are f***ed. The Fourth Turning is upon us.

Yeah, things change pretty fast. IIRC the bets are 80% for a .25 cut? I’m not sure that will move the needle much but IMO consumers will react.

I agree with your other points, especially the one about debt. I read an article a few years back that worldwide unfunded pension obligations are higher than the existing money supply. Hard to grow out of that.

 

[Terrel L. Shields]

IMO we won't see a rate drop until early next year, and possibly not until after Powel is out in May 26.

I think Powelll with have to relent before then and move the interest rates marginally lower although I think its impact will be minimal.

if the housing industry had continued to build new properties to keep up with buyer demand,

Too much of the market has been geared to destroying older but serviceable housing and replacing with more expensive homes. They are buying properties with houses that have remaining life but because they paid way too much for the lot, they have to destroy the existing building and rebuild a McMansion to resell. This is systematically reducing the supply of starter homes and homes for the average working guy and gal... and further, we are seeing more single-person housing needed but that is a no-no apparently. Builders think they cannot make enough money. The problem should be obvious. Tearing a house down to build a new one adds not one single thing to housing supply. Why not buy and remodel? Or perhaps remodel and add an ADU. THAT would add to the housing supply.

I did 8 new construction houses last year in a small town. They sold like hot cakes and sold for less than $150k. 2 bed houses, all new, modest but livable. Young people do not need McMansions. They need affordable housing and then spend their surplus money on investments and savings.

 

[Surf Cat]

That's amazing that you can get a house that cheap these days....especially new.

What's that black patch on the front yard? Bubblin crude, Black Gold, Texas Tea? Or did someone bury a cow there prior to construction?

 

[Non Sequitur]

Well......from an economist I follow on LinkedIn:

"This morning, the Bureau of Labor Statistics released its CPI inflation report for July 2025. Overall, prices increased by 0.2% on a seasonally adjusted basis during July, up 2.7% during the past twelve months, which was cooler than the expectation of 2.8%. Shelter was the main driver of inflation last month.

Core inflation (excluding food and energy) rose by 0.3% during July and 3.1% during the past twelve months, which was hotter than the expectation of 3.0%.

In response, the 10-Year Treasury yield rose 5 basis points to 4.32% and the 30-year Treasury yield rose 5 basis points to 4.90%.

With core inflation running 50% about the Fed's 2.0% target, you can kiss goodbye any chance of a rate cut at the FOMC's September meeting."

Thoughts?

 

[DTB]

That's amazing that you can get a house that cheap these days....especially new.

What's that black patch on the front yard? Bubblin crude, Black Gold, Texas Tea? Or did someone bury a cow there prior to construction?

Rural oil change bay-LOL