Market Update - August 14th, 2023

School is back in session for most of us this week.  We hope everyone enjoys these final days of summer with the kiddos before the chaos begins 😊

We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers.  Be sure to follow us!

Inflation : Improving but the Road is Long

Wednesday, the monthly Consumer Price Index (CPI) for July came in at 0.2%.  This was down slightly to estimates and brought the year-over-year CPI to 3.2% for all items.  

As you can see from the chart above, the 0.2% in July 2023 replaced the 0.0% in July 2022, which caused the yearly number to rise from 3.0% to 3.2%.  It obvious we still have a long way to go before we get back to the Fed’s target of 2.0% year-over-year CPI.  This is why Kreg and I believe inflation is going to “stick”, hanging around for longer than we all want, keeping rates higher.  The markets appear to be thinking the same thing as rates continued to climb even after the friendlier CPI numbers on Wednesday.

We believe we’ll start to see some meaningful moves in “All Prices” inflation over the next 6-12 months driven mainly by shelter costs coming down.  Additionally, we start to lap some higher monthly numbers like September/October of 2022 and January/February of 2023 (chart 1 above).  Once we replace those higher monthly figures, the overall yearly CPI calculation will naturally pull lower.

Additionally, Core CPI (which removes food and energy costs from the calculation) looks to be breaking on the downside.  You can see in the chart below that we had two very low monthly Core CPI.  August/September of 2022 were elevated and once those are replaced with (hopefully) lower figures, annual Core CPI should move closer to the Fed’s target.

Key Takeaway: As you can see, we are moving the in right direction.  Core CPI is breaking, which is a good sign.  The Fed’s isn’t backing off their goal of 2% annual inflation.  We’ll get there eventually; it’s just going to take some patience.  The Fed needs to pivot away from additional market manipulation and let this play out.

Artificial Intelligence Meets Real Estate

Housing Wire had a fascinating article detailing ways real estate agents can leverage artificial intelligence.  From scaling lead generation to automating client engagement to even recruiting, agents will work differently in the future, whether you want to or not.  See the full article here : Four Ways Real Estate Agents and Brokers Can Leverage AI.

Key Takeaway: AI is coming and will disrupt the real estate environment just like every other industry.  It’s wise to start familiarizing yourself with the technology, explore the options that are available and discern the gimmicks from the must-have applications.  If you can be on the cusp of something like this, you’ll be lightyears ahead of your peers down the road. 

Instagram Posts from Last Week

• Parents – Bust the Myth!  Kids Can Buy Sooner Than You Think

• US Debt Downgraded – How Will This Affect Mortgage Rates?

Don’t hesitate to reach out if you need anything at all. Have a wonderful week!