Happy Friday! Brian Manning here with the weekly update, let's get right to it! But first of all our 9th annual Fall Fiesta is taking place Saturday, November 11th. Super pumped to benefit for Conscious Alliance! Come on out, raise some money for a good cause. Catered by McDevitt Tacos - all you can eat + an open bar. It's gonna be a great time. Incredible musical guests! Come on out!

Let's get right to the Friday Market Update though! Monday this week we had Fed President , Chicago Fed president, Austan Goolsbee on CNBC. Markets didn't love that he was talking about inflation saying the Fed is is very much focused and super determined on this 2% number. We definitely have some work to get to to get to that number. We're gonna look more of that in a moment. But markets are really not loving how focused they are on that 2% number.

Tuesdays we've got Case Shiller given us feedback on the month of July, and their home price index. Let's look at what a Case Shiller has going on. So Case Shiller is kind of the gold standard of home price index. So for the month of July, we're up six tenths of a percent 2023 is on track for 5% appreciation. If you look at all of the places that we track home appreciation whether it's Case Shiller FHFA, CoreLogic Blacknight. Everybody has numbers in the positive 2023 shows appreciation of 5% 7% 9% a percent 7%. So still seeing resilience in the housing market is really just lack of inventory. We know rates are higher. We know there's a lot of buyers out there. I talked to a lot of people that are interested in purchasing home but there's not a lot of inventory on the market right now.

We also got a new home sales this is for the month of August. Inventory on a month over month basis was of 1%. But on a year over year basis inventory is down 5.2% If you actually look at available inventory, so not homes that are permanent, slated to be started just available moving inventory right now across the country that says 76,000 homes, that's only a 1.3 months supply. So it's still very tight as far as new construction is concerned.

We also got some feedback from the Conference Board Consumer Report, sorry, Conference Board Confidence Report. And this shows information on consumer confidence across the country. And it just shows the generally consumers a little bit nervous right now it's kind of interesting, though. You see the Federal Reserve is just you know, definitely thinking everything is rosy, unsure of what we're gonna do a future rate hikes, they might continue to hike rates, they might not, I'm not really sure. But I feel like a consumer confidence is definitely moved a little bit lower.

Wednesday this week we've got pending home sales. So this is signed contracts, pending home sales was down 7%. I'm not surprised to see this again, inventory is just at all time record lows, we have very low inventory in the marketplace right now. So not surprising to see that.

Thursday's we've got some feedback on Q2 GDP. This is on consumer consumption, this move from being up 1.5%. This is another reading. I think there's three readings the GDP that you get on based on a quarter. And this shows that originally thought consumer consumption was up 1.5%. But now it was moved up to only a half a percent. So you can see consumer spending less and less money.

Today we get the PCE that's a personal consumption expenditure. This is for the month of August. This is the Federal Reserve's favorite gauge of inflation. This is what the Federal Reserve is looking at. They're specifically looking at the core rate because the core rate of inflation strips out volatile items such as food and energy, and they're hyper focused on getting that number to 2%. So let's just look at inflation real quick and see what's going on.

So inflation, for the month, the headline number was expected to come in at five tenths of a percent lower, we actually got four tenths of a percent lower. So came back a little bit lower than expected, but still up the reason why the headline numbers up. That's because it includes volatile items such as food and energy, energy being fuel costs, so everyone's seeing fuel costs higher across the board when you go to the gas station. So that caused the headline number to be higher.

On a year over year basis, that number increased from 3.4% to 3.5%. But what the Federal Reserve's focus on is the core rate, because the core array strips out volatile items such as food and energy, and the core rate on a month over month basis was only a one tenths of a percent, it was expected to be up anywhere from two tenths to three tenths of a percent on a year over year basis that moved the quarry down from 4.3% to 3.9%. So we're definitely seeing it move in the right direction. But we looked at this before, and we're still seeing this lag and shelter.

So there's two inflation readings that we look at. There's the CPE that's the consumer price index. And there's the PCE that's the personal consumption expenditure. The PCE was a report that we got today, they both look at shelter, PCE, shelter makes up 21% of the reading there. So if we look at the true shelter cost, the blue line is the true shelter costs. We saw shelter costs peak in the beginning of January 2022 and come down. Right now shelter costs are going up at 3.1%. But they lag in the CPI and the PCE readings by 12 to 16 months. So right now we've seen those cost crests and are starting to come down but they're slowly starting to catch up and they're starting to become impactful in the inflationary readings.

What's interesting, if we look at this, if we actually had took the PCE reading that we have today, so they came back at 3.9%. If we actually took the real time, shelter cost, and we looked at real time inflation, real time inflation right now is 3%. versus taking into account the lagging shelter costs that is really factored into this number. So inflation is moving in the right direction. It's just always going to be stubborn and takes a little bit of time to see it move lower. Again, the Feds target is 2% or 3.9%. wasn't that long ago were 9%. So we're definitely seeing the numbers come down. Inflation is the enemy of interest rates, you will continue to see it to move lower, it will be impactful it will impact mortgage rates and you will see mortgage rates move lower. I'm around all weekend. If you have any questions give me a call. If you want to learn how we're closing purchase transactions in 15 days, start to finish, reach out to me. Let's go through our strategic buyer consultation. Happy Friday. Have a great day!

-Brian

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