They Don’t Know

They Don’t Know

The Fannie Mae Home Purchase Sentiment Index® (HPSI) released this week jumped 3.5 points to 70.7, its highest level since March 2022, due primarily to 82% of consumers being confident in their job security and 36% of consumers expecting mortgage rates to decrease in the next year. 36% might not seem like a big deal, but would you think it is if you knew this was all time survey high?

CEO Confidence rose to a 2-year high in a just released survey benefiting from a booming stock market, declining inflation rate and low unemployment.

Consumer Confidence jumped to the highest since July 2021… which feels like a decade ago to me by the way.

Can all these confidence measures be delusional?

Freddie Mac published their weekly rates 2 days ago saying rates have stabilized, increasing only 0.01% from 6.63% to 6.64%; meanwhile an incredibly strong jobs report and Fed speak all week pushed rates up to 6.98%. (I went deep into these discrepancies 2 weeks ago, check it out here).

6.64% verses 6.98%, does it matter? (p.s that’s a HALF a point.. it’s kind of a big deal)

The Fannie Mae Home Purchase Sentiment Index® (HPSI) released this week jumped 3.5 points to 70.7, its highest level since March 2022, due primarily to 82% of consumers being confident in their job security and 36% of consumers expecting mortgage rates to decrease in the next year. 36% might not seem like a big deal, but would you think it is if you knew this was all time survey high?

CEO Confidence rose to a 2-year high in a just released survey benefiting from a booming stock market, declining inflation rate and low unemployment.

Consumer Confidence jumped to the highest since July 2021… which feels like a decade ago to me by the way.

Can all these confidence measures be delusional?

Freddie Mac published their weekly rates 2 days ago saying rates have stabilized, increasing only 0.01% from 6.63% to 6.64%; meanwhile an incredibly strong jobs report and Fed speak all week pushed rates up to 6.98%. (I went deep into these discrepancies 2 weeks ago, check it out here).

6.64% verses 6.98%, does it matter? (p.s that’s a HALF a point.. it’s kind of a big deal)

First quarter GDP is expected to be a staggeringly strong 3.4%.The economy and job market have been surprisingly strong. CPI, consumer price index, comes out on Tuesday. Inflation has come down nicely, but is still “too high” per the Fed. Rate cuts will come, but not too soon, at least not yet…

Having said that, while the economy is on fire, it is showing cracks. Credit card delinquency is on the rise with 8.5% of all card holders now delinquent (the highest since 2011) as the average credit card balance jumped 10% to $6,360 for a total credit card debt nationwide of 1.13 trillion. Remember when it surpassed 1 trillion just 8 months ago? I’m watching this.

Consumers want rates to come down. So do we. Real estate agents and mortgage lenders have been waiting almost two years. But consumers aren’t waiting; they’re spending. Maybe not on homes as we all know there is an inventory issue, but I believe it’s more than that. I believe a lot of the real estate industry has been operating out of fear instead of abundance. That fear has worked it’s way into the psyche of our prospective homebuyers. What else explains credit card spending up, car purchases up, confidence up, profits up. I’m speaking a bit tongue in cheek here, but I’m convinced we make our own destiny. We manifest it.

We have to get out of our own way and exude a confidence that mirrors July 2021 since that’s where consumers are. Last week I shared an incredible 230,000 wealth gain by owning a home. Did you know if you stretch that out to 5 homes instead of one (revisit last week’s Saturday blog) over 30 years; that’s a 7.2 M-I-L-L-I-O-N dollar portfolio. Real estate doesn’t appreciate in a straight line but as it turns out, trees really do grow to the sky. At least they do here in Denver.

So let’s become the CEO who has the most confidence we’ve had in 2 years. Let’s crush this market educating and inspiring. Let’s get creative and LOUD. Let’s not let 2024 be just as good or slightly better than 2023, that’s for the other guy. Let’s you and me, have our best year yet. Not because we can, but because our clients have 7.2 m reasons why we must!