The food is terrible and the portions are small (Part 2)
The housing market continues to weaken. But why? If the Fed is buying tons of mortgages, how could things slow down? Simple: interest rates and housing prices. Higher rates + higher prices = fewer qualified borrowers. Where have we seen this before?
The second chart shows plunging homebuyer confidence and this is reflected in the existing home sales data. One of the side effects of very high inflation is consumption falls as people can’t afford to pay the market price. I can hear my mother’s voice from the 1970s: I love you, stop that, and we can’t afford that! Government policy makers are about to find out that inflation is not growth, just as they did in the 1970s!
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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