Saturday, October 15, 2022

From Bad to Worse

Note: Is stevenmagallanes520.nims@blogger.com your correct email? You haven't clicked in a while, and we're concerned you might lose access. Please confirm your address with one click here.

Manward Financial Bulletin
 

From Bad to Worse: The Bottom's Not in Yet for This Sector

SPONSORED

"I've Never Recommended Something Like This Before"

AG on Stage
 

Has the world's greatest stock picker gone mad?

He picked Amazon, Netflix, Apple...

And now this?

Alexander Green makes a BOLD prediction to a huge crowd in his latest TEK Talk...

And it might just help set you up for retirement.

Click here to see more.

Amanda Heckman

Amanda Heckman
Editorial Director

Oh boy... things have gone from bad to worse.

After five consecutive rate hikes, it's clear Jay Powell and the Fed have been firing blanks.

Moving from near-zero interest rates to 3%-3.25% has barely made a dent in red-hot inflation numbers.

The CPI for September came in at 8.2% year over year, higher than the 8.1% expected. And it was 0.4% higher than the previous month.

The news guarantees further stiff rate hikes... and proves we've got a long way to go in this economic battle.

For weeks we've been telling you about some of the short-term opportunities traders can jump on, but there's one sector that's troubles are far from over.

[FOR FREE? Click here to get the names and ticker symbols of the top dividend stocks in the market!]

From Bad to Far, Far Worse

The housing market has gone from bad to far, far worse.

The 30-year fixed mortgage rate clocked in at 6.92% this week, a 20-year high. It's more than doubled since the start of the year.

30-year fixed-rate mortgage

View larger image

And the news that more rate hikes are coming means mortgage rates won't be coming back down anytime soon.

While long-term mortgage rates aren't determined by the federal funds rate (the short-term interest rate we all know and love), they are certainly influenced by it.

If the market believes the federal funds rate will remain high, that will apply upward pressure on long-term rates.

At the same time, housing prices still remain inflated. After peaking in June, prices have come down a bit. But we're still in the stratosphere compared with where we started the year...

Median Sales Price of Existing Homes

View larger image

New home prices have taken off since the start of the pandemic and haven't backed down...

Median Sales Price for New Houses Sold in U.S.

View larger image

Adding these two trends together, we get some scary math.

At the current rate, the monthly mortgage payment for a median-priced ($427,000) home with a 20% down payment is $2,254, according to Realtor.com. That's 75% more than it was the same week last year, and it adds about $11,600 to the yearly burden of financing a home.

No surprise, then, that mortgage applications for purchases are down 39% from a year ago... and contract signings are down 24.2% year over year.

More and more folks are getting priced out of homes... and the slowing activity is taking a toll on homebuilders.

SPONSORED

1 Trade Idea Delivered Every Week

Watch This
 

An 83% win rate and a guarantee he beats it!

Has this former CBOE trader lost his mind??

Watch this immediately.

 

Homebuilder sentiment fell for the ninth month straight in September. It's in negative territory at a reading of 46 - the lowest sentiment has been since 2014.

It's easy to see why...

According to U.S. Census Bureau figures, there were 14% more homes under construction this August than there were a year ago, when the sales market was stronger.

With few buyers in the market, homebuilders are holding on to a lot of inventory.

That means they're getting desperate...

According to the National Association of Home Builders, 24% of homebuilders reported reducing home prices in September, up from 19% a month prior.

Major homebuilders, including Lennar and KB Home, have walked away from contracts to buy thousands of lots for future building projects.

And now homebuilders are selling homes in bulk as a way to quickly offload inventory. They're reaching out to real estate investors and rental-home investors... and even offering discounts of up to 20% to sweeten the deal.

But with rising mortgage rates, even offloading inventory in bulk is no sure thing. New homes accounted for just 2% of total investor home purchases in July, compared with 6% in the second quarter of 2020.

Put all these pieces together... and we get a clear picture that a recovery in the housing sector is nowhere in sight.

And as inflation continues to hold strong... we haven't even hit bottom yet.

There's more pain ahead.

"An Army of Millionaires"

The BBC reports that Tesla's wildly profitable stock "created an army of millionaires."

These so-called Teslanaires include average people like Jason from Los Angeles, Bruce from Atlanta, Scott from New York and Basel from Pittsburgh...

Army Millionaires
 

But if you missed out on Tesla's incredible 17,000%-plus rise in the last decade...

Today, you have a second chance.

Click Here to See Why One New Company Could Be the Next EV Giant

 

We Should All Be Furious About This New Law

 

It got hardly any news coverage last week. It should have gotten plenty. Every talking head on TV... every columnist in the opinion pages... and every teacher in our public schools should be talking about the idiocy of what just happened. It's government gone wild... and we're all paying for it. Continue reading...

The Crucial Factor in Our Decision Making

 

This week, Joel responds to a heartbreaking letter from a reader... and shines a light on how we make decisions about our lives and our money. It all has to do with how we see the world... and that can make a critical difference in the outcomes we hope to see. Keep reading...

Stock of the Week: A Clean Shot at a Double

 

In a market where virtually everything is taking a hit, Alpesh has found a company that provides services that will only grow in demand as environmental issues move to the forefront of government policy. Its profit margins are growing, which gives the company a good buffer in all the current economic headwinds. Alpesh sees the potential for a double with this one.

Get all the details on the stock - including its ticker - in the latest episode of Stock of the Week. Click here or on the image below to watch it.

Video - Don't Waste Any Time
 

Want more content like this?

YES
NO
 

Amanda Heckman | Editorial Director

Amanda Heckman is the editorial director of Manward Press. With unrivaled meticulousness, she has spent the past dozen or so years sharpening Andy's already razorlike wit... and has worked with numerous bestselling authors and award-winning financial gurus along the way.

 

No comments:

Page List

Blog Archive

Search This Blog

A $50 Backdoor Play On Elon's Next "Super-IPO"?

Elon Musk has become Trump's most trusted advisors. According to one legendary investor... We are leading up to the world...