Nov 28, 2022
One can see that while the median price has been rising, new existing home sales have been in a general decline for several months. In simple terms, it comes down to affordability; there is a limit to how much disposable income the average American has to allocate towards their monthly payments.
In some instances, monthly payments have increased 50% for a similar-priced house purchased
roughly 8 to 12 months ago. Housing is another leading economic indicator. For most Americans, homes represent their most significant investment, and housing wealth accounts for approximately half of their total household net worth. When housing prices fall, Americans spend less because they feel poorer. As housing prices fall, Tax revenues drop, homebuilders cut back on building projects, construction workers get fired, and unemployment levels rise.
A new survey from consultancy PwC released this month showed 50% of companies are planning
to reduce overall headcount. Additionally, 46% of companies said they are dropping or reducing
signing bonuses, while 44% are rescinding offers
Not too long ago, wage inflation was a big issue, and at that time, in the Market Update service and in our private forums, we stated that soon the opposite would occur. It is now coming to pass. Shortly a plethora of articles will emerge saying how the average American will probably have to work until he dies as opposed to retiring at a certain age.
When things appear dire, that is when contrarian investors should raise their heads and start looking for deals. Experts are notorious for making the loudest noise at or close to market bottoms. While we expect existing home sales to decline and price to fall, the market will bottom once the Fed deflects. The Fed will take a knee as both the stock market and the economy are hooked on easy money. Risk takers can start looking for bargains as it is now a buyers’ market. Don’t be in a rush to buy; the idea is to look for the best possible deal.
Other Articles of Interest

Stock market technical analysis
Read More

Market Sentiment Made Easy: Sell Euphoria and Reap Rewards
Read More

Tactical Investor Lot Size
Read More

Panic Buying Equates to Fools Paradise
Read More

Panic Selling: Buy The Fear & Sell The Joy
Read More

Velocity of money formula: What is it?
Read More

Copper Market: what is it signaling today?
Read More

Define Sentiment: Unveiling the Power of Emotional Intelligence in Investing
Read More

Hyperinflation Definition: It’s Elementary
Read More

How to become a better investor ?
Read More

Inflation and deflation: Which one rules the Roost?
Read More

Gold and inflation: Is Gold The Best Hedge
Read More

Stock Market Monthly Trends: How to Profit from Market Cycles
Read More

US bond Market & The Dollar
Read More

Current stock market trends
Read More

Forever QE on steroids
Read More

Inflation 2021 Is a Non Event
Read More

The Limits of Herd Behavior in Markets
Read More

Stock Market Monthly Trends Indicate that the Dow is heading Higher
Read More

Dow Jones Trend: Markets Poised to Soar Higher?
Read More

The Trend Blazer Service
Read More