Monday – Housing Consumer Identifies Through Ketchup As They Slow Their Spending

More than half of consumers identify as middle class and that fits nicely within the American Dream narrative. Housing used to fit nicely into that narrative too, before the 2022 Fed pivot created higher mortgage rates and the lack of inventory made bidding wars a fact of life. But for the consumer, some of the financial pain has been eased through higher wages as they were shifted from decades as an economic deflationary force to an inflationary force, no one seems to feel empowered. This is reflected in the lackluster spring housing market, typically, the Super Bowl of the annual housing market. Real estate professionals are feeling the pain of weak transaction volume right now.

Since the beginning of 2023, the housing market music changed and while many still hate the band Nickelback, consumer spending is falling, making the argument for a Fed rate cut more reasonable each passing month.

Because of the sharp drop in affordability and the idea that mortgage rates will remain higher for longer, we expect to see more people purchasing homes with friends, just like we’ve been seeing more purchases with cash and other ways to circumvent high mortgage rates.

While I’ve touched on all these elements separately before, I thought it would be useful to tie them all together. But that’s only part of the story. There is growing consumer resistance to rising housing prices, there is rising confusion in the aftermath of the NAR settlement and a powerful remaining legacy of racism in housing. In fact, I just read about the resolution of an awful situation created by a racist seller that was thankfully resolved by the real estate agents on both sides of the deal. Yes real estate agents still provide a needed service in addition to being a critical buffer during the negotiation process.

But I digress…

My American Dream included going to college and to do that, I won a national scholarship offered by Heinz. I wrote my essay in blue ballpoint pen in one pass on the application with no expectation of winning. Then I got a letter in the mail notifying me that I won the national prize! As a result, I’ve always had a soft spot for Heinz ketchup even though it has more sugar than a similar amount of ice cream. Like that factoid, I did not expect that a bar code scan on a bottle of Heinz ketchup can rock, but there you have it.

Did you miss Friday’s Housing Notes?

This Is A Whole New Thing – Housing Notes Daily

Well, I’ve been writing this Housing Notes newsletter since March 2015 (more than 9 years as a weekly exercise) and at last count were nearly 500 weekly iterations, evolving into a Friday 2 pm launch date no matter where I was in the world, whether or not I was on vacation, and what was going on in my personal life. It was such a consistent routine that many subscribers told me it marked the beginning of their weekend. But what is going to be so new about Housing Notes Daily?

Less is more. The type of content will largely remain the same but in shorter format and the delivery will be daily instead of weekly. Starting immediately, Housing Notes will be released 5 weekdays each week at that same 2 pm Eastern time moment. My sidebar passion project Appraiserville is being moved to the Beehiiv platform soon and I plan on releasing it weekly while linking from here temporarily. More on that soon.

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