Friday Market Update: June 3rd 2022 with BRIAN MANNING

Happy Friday! Brian Manning here with the weekly update. Let’s get right to it. Monday this week was Memorial Day. I hope everyone enjoyed their day off of work. So, nothing to report there.

Tuesday this week we got feedback from Case-Shiller. Case-Shiller is kind of the gold standard in reporting on the housing market. This is for the month of April. So, it’s a little bit dated. Year-over-year appreciation per Case-Shiller is at 20.7%. That might actually be the hottest number on record.

We also got FHFA, so they give us feedback on housing market and appreciation. They strictly look at homes across the country that are single family residences with conventional mortgages attached to them. And FHFA was at 18.7% a year-over-year basis as well. So, the thing to really pay attention to is that again, this is lagging, this is the month of April. This doesn’t really take into effect the mortgage rate increases that we’ve seen.

We have to see where this heads going forward. You know, certainly 20, 21% appreciation is not sustainable. I’ve been talking about this for a while. I would not mind at all watching this cool off I think we’re going to see that happen here in the near future because 21% appreciation is just an insane number. It’s just not something the housing market then can really keep going with.

Wednesday this week, we’ve got consumer confidence report. Consumer confidence down 2.2 points. Certainly seeing just a little bit of uncertainty. I know just from buyers that we’re talking to, they’re just a little bit nervous. They’re uncertain with what’s going to happen. Just the economy and the housing market in general. So, you saw a little bit of a slip in consumer confidence there.

But… We also got apartment list. So, they track rentals across the country and new rentals on a year-over-year basis are 15.3%. So, rental costs are going up and renewals are up 8% to 10%. So, whether you’re renting a new place or signing a lease for renewal certainly makes being a first-time homebuyer appealing because if you’re watching your new rental rates go up 15% or renewals of 8% to 10%. Renting is certainly extremely costly right now as well. So, that’s definitely still going to be a strong contributor to the housing market and keeping it strong.

Thursday this week, because there was a holiday, we got jobs report. So, first week of every month, we get jobs reports. Typically, the first Wednesday we get the ADP report. The first Friday we get the BLS. But when there’s a holiday in there like Memorial Day, it shifts a little bit. So, this Thursday, we got the ADP report. ADP reports on private hires across the country. And that was a little bit of a mess. There were expectations of 300,000 jobs and we got 128,000 jobs created. This is for the month of May.

And then also we have the BLS report today. BLS report came out really strong. There was an expectation of 300,000 new jobs created in the month of May and we got about 390,000. So, still really good to see a great strong jobs report there. But if you look at the media, you pay attention to what’s going on there as far as employers are concerned, there’s definitely some cause to be concerned and to pay attention to because you had Tesla come out yesterday. They employ 100,000 people. They’re pretty worried about the economy going forward. They want to cut 10% of their workforce and, you know, it’s 10,000 people. That’s a lot.

You look at Coinbase. Coinbase came out and said that they pausing their hiring. They’re even rescinding some of the offers they put out. You have Facebook with a freeze on hiring. So… You know, employment numbers are strong right now. We’ve talked about this in the past. When you start to see employment cool off and we see us moving past the all-time lows in unemployment that we’re at right now, you see us moving past the job reports that we’re seeing right now, that’s going to be a really good indicator of recession.

So… We’re going to have to wait and see what happens in the next, you know, month, two months, three months of job reports. But I won’t be surprised if you start to see a little bit softening in the job market there. Like I already said, that’s going to be a very good indicator of recessionary pressures going forward.

I’m available all weekend. If you have any questions, let me know. If you want to go through our strategic buyer consultation, call me on my cell phone, text me. I’d love to help you in any way I can. Happy Friday! Have a great day!