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* Banks, foreign buyers and money managers  have stepped back from buying mortgage bonds as has the Fed, the largest investor in that market, widening the spread that mortgages trade at versus Treasuries, which directly translates to the borrower’s mortgage rate helping to push mortgage rates to their highest level in 20 years. Some banks are also opting to hold mortgages, instead of mortgage bonds, on their books. (WSJ)

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* In Q4 2019, US households held about $1 trillion in what was effectively cash—currency and accounts against which checks could be written. By the 2nd quarter of 2022, the amount had leapt to $4.7 trillion. Nothing like this has happened in the past 70 years—though consumer spending stats point to something similar having occurred during World War II. The federal government put almost $1.5 trillion directly into Americans’ pockets over the course of 2020 and 2021 with stimulus checks and supplementary unemployment benefits, and other aid programs indirectly funneling more. Those who kept their jobs and/or were above the stimulus-check income limits enjoyed windfalls from the stock and real estate markets. Spending options were few, especially early in the pandemic, and until recently interest rates were so low that there wasn’t much point in moving money out of one’s checking account (or from under the mattress). This massive cash reserve makes this 'recession' very different. (Bloomberg)

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* Shares and bonds in Chinese real estate companies rose sharply on Monday as a sweeping plan by Beijing to support the property market was interpreted as a critical moment in arresting the decline of the debt-ridden sector. The Hang Seng Mainland Properties index closed 13% higher in Hong Kong. Shares in Country Garden, one of China’s biggest developers, gained more than 36%, while several of the group’s dollar bonds surged nearly 50%.

 

* Alternatives to high mortgage interest rates? Loans against stock or other asset portfolios (safer when markets are down), and seller financing. (WSJ)

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* Dubai ranked No. 1 in annual price increases in the 3rd quarter, topping the list of the 45 cities tracked. Prices for its luxury homes surged 88.8% compared to the same 3-month period a year earlier. 39 cities recorded annual price gains, including Miami (30.8%), Tokyo (17%), New York (5.2%) and London (2.7%).  Wellington, New Zealand’s annual prices dropped most significantly at 18%, followed by Frankfurt (-9.4%) and Stockholm (-5.2%). The collective wealth of the UHNW population in North America fell 13.9% to $14.5 trillion, close to a three-year low. While Hong Kong remained the city with the highest number of UHNW individuals, although the population fell 6.8% to 15,235, New York followed with 14,235. London was the only city in the top 10 that saw a rise, increasing 2.5% to 6,102. (BARRONS)

 

* The ultra-high-net-worth (UHNW) population—those with a net worth of $30 million or more—fell 6% to 392,410 in the first half of 2022 (down 10.3% in the US), a sharp reversal of last year’s 14% growth and the first downturn in UHNW numbers since 2018. There were 6 U.S. cities in the top 10 UHNW cities: New York, Los Angeles, San Francisco, Chicago, Washington, D.C., and Dallas. (WEALTH-X)

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* Inflation subsided to 7.7% down from a high of 9.06% in June.  The consumer price index, a broad-based measure of goods and services costs, increased 0.4% for the month and 7.7% from a year ago. Respective estimates from Dow Jones were for increases of 0.6% and 7.9%, so the figures came out lower than expected. Shelter pricing cooled along with used car prices and apparel. Mortgage rates fell sharply yesterday after a government report showed that inflation had cooled in October. The average rate on the 30-year fixed plunged 60 basis points from 7.22% to 6.62%.  The jumbo 30-year fixed mortgage rate is 6.15% and the jumbo 15-year rate is 6.27%.....(CNBC)

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* U.S. home prices fell a staggering 27% from 2006 to 2012.....but not in all markets. The declines were hyper-localized.  

 

* Demand for refinancing continues to fall as rates hover around 7%, dragging the overall number down, now at the lowest level since 2000. 

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* REDFIN estimated the housing market will be 30% smaller in 2023 compared to 2021, a record-shattering year on all standards.

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* Last month in Westchester, New York our Compass Cares team partnered with LiftingUp Westchester to provide warm sweatshirts and emergency kits to local women in need. The team's initial goal was to raise $300, and ended up raising a whopping $800! This resulted in a donation of 40, $20 gift cards to local grocery stores for local women to build their own essential kits. In addition to this, the team donated 50 Compass Cares sweatshirts… just in time for the cold weather. Way to go Westchester!

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* The NAR expects about 5.2 million homes to be sold in 2022, about a 15% decline from 2021. They expect fewer homes will likely be sold in 2023 — about 4.8 million homes. (NAR)

 

* During all of the last 6 recessions, mortgage interest rates dropped ....anywhere from 0.625% (2001) to 5% (1981). (Freddie Mac)

 

* Forecasts for sales pricing of homes in 2023 vary considerably, anywhere from up 2.8% (Mortgage Bankers Association) to a drop of 4% (Zelman).

 

* The median rent in the USA has almost tripled since 1988. (Census)

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* Around 80% of homebuilders are upping their buyer incentive offerings.

 

* The affordability of the typical new home sold in the U.S. nose-dived in September 2022. At an initial estimate of 43.6% for September 2022's median household income, the cost of owning a typical new home has never been higher for a typical American household. (Seeking Alpha)

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* 13 of the 50 major US housing markets surveyed saw an inventory DECREASE......most of them - about 70% - were on the East Coast.

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* The inventory of active listings in the U.S. grew 33.5% year over year in October, surpassing 2022 levels. Some classifications and areas remain terribly under-supplied. In Greenwich, CT, Bill Andruss reminded me that only 209 single-family homes and 45 condominiums are currently on the market and single family closings were down 30% compared to a year ago, mostly driven by lack of supply.  Among the US’s largest 50 cities, 42 saw their active inventory rise in October from historic lows. The top gainers were Phoenix, Ariz., which saw the total number of for-sale listings rise by around 174%, followed by Raleigh, N.C., with a similar jump of around 167%, and Nashville, Tenn., with a 145% increase. Inventory of newly listed homes, however, rose in just four markets: Nashville; New Orleans, La.; Dallas, Texas; and San Antonio, Texas. Cities in the West and the South saw the biggest increases in the share of price cuts. Nearly 36% of listed homes in Phoenix had price reductions, followed by 31% in Austin, Texas, and 24% in Las Vegas, Nev. (MARKETWATCH)

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* Buyers who purchased homes in the year ended in June moved a median of 50 miles from their previous residences, according to an NAR survey released, the highest on record in annual data going back to 2005 and follows five straight years in which the median distance moved was constant at 15 miles. 48% of home purchases were in small towns and rural areas, a record in data going back to 2003 and up from 32% a year earlier.

 

* Historically, first-time buyers made up about 40% of the market. But the share of first-time buyers fell to 26% during a recent 12-month survey period, from July 2021 through June 2022, plummeting to the lowest level since the trade association began tracking such data in 1981. The median age for first-time buyers was, at 36, the oldest it has ever been since 1981, as was the median age for repeat buyers, which rose to 59, during the survey period. (NY TIMES)

 

* People from the ages of 55 to 74 accounted for 42% of home buyers, while the share of people from the ages of 25 to 34 accounted for only 14% of buyers.

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* Many of us are confronted by sellers dismayed by the fact that they did not sell at the 'peak of the market'......they are not alone. Global equities have shed $28 TRILLION in value from their highs. (FT)

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​* Housing starts for single-family homes dropped nearly 19% year over year in September, according to the U.S. Census. Building permits, which are an indicator of future construction, fell 17%. Pulte, one of the US’s largest homebuilders, reported its cancellation rate jumped from 15% in the second quarter of this year to 24% in the third. (CNBC)