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Proprietary Data Insights Top Stock ETF Searches This Month
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We’re About To Hit Next Level Unaffordable On Housing |
Before we continue our October Housing is Haunted series with a look at the ever-increasing and just astonishing unaffordability of this scary market, it’s time to check in with our Trackstar database of the stocks and ETFs investors search for most. Interest in Nvidia (NVDA) continues to fade with Tesla (TSLA) and Apple (AAPL) now comfortably in their typical #1 and #2 positions. It likely won’t be long before Amazon.com (AMZN) leapfrogs NVDA for the third spot. Among financial professionals across our 100-plus financial media partners, NVDA now ranks fourth in searches behind #3 TSLA, #2 AAPL and #1 — the SPDR S&P 500 ETF (SPY). So SPY generates the most interest of all equities among the pros and the fifth most interest among retail investors. As we like to say here at The Juice, if you do nothing else invest in SPY and the Nasdaq-100 tracking Invesco QQQ ETF (QQQ). From there, maybe start exploring sectors of interest … such as housing. In tomorrow’s Juice we consider getting at the broad housing market via ETFs. We’ll see how some housing and housing-related ETFs are faring amid this crisis. Maybe there’s opportunity out there? But first, speaking of the crisis … Even we can barely keep up with the developments. It feels like we were just talking about 6% mortgage rates, then rates closer to 7%. Then, from last Monday’s Juice — we’re talking a mere eight days ago: As of the third week of September, the median sale price of a home in the United States was $372,500. That’s actually up 3.1% year over year. With the interest rate on a 30-year mortgage hovering around 7.5% lately and a 10% down payment ($37,250), the monthly payment on the typical home comes to $2,344. That’s 8.6% higher than our January 2023 calculation. Both numbers are before factoring in the additional expenses. So let’s do that. Tack on property tax and insurance and the monthly payments increase to: January 2023: $2,857 September 2023: $2,995 Three thousand dollars a month to take on the median priced home in America today. So, as we write this the freaking rate on a 30-year mortgage stands at 7.8%. It depends on who you get your data from, but, at the moment, estimates for the median sale price of a home range from roughly $407,000 to $430,000. And Redfin puts the median list price of a home in the United States at $429,500. All of these figures are up month-over-month and year-over-year. Just to be super conservative to the low end, we’ll call it an even $400,000. So, between eight days ago and today, your monthly payment, after a 10% down payment, on the median-priced home in America has increased to $3,291, including taxes and insurance. That’s a $296, or nearly 10%, increase in just over a week. If we go with the high-end estimate of $430,000 for the typical home in America, that figure increases to $3,536 a month. And it makes sense to go high because you can’t touch much for $400,000 across large swaths of the nation. In Los Angeles, the median list price of a home is now $1.2 million, up 22.5% annually. The median sale price is $959,000. At that level, the monthly payment you’d be taking on in today’s high-rate environment is $7,888. And it’s so muchl about rates. Drop the rate to 6.8% and the monthly payment becomes $7,302. Knock it down to 5.8% and the monthly payment on an almost $1,000,000 home decreases to $6,739. At 4.8%, it’s $6,203. Which leads us to something we saw on CNBC the other day. Andy Walden, vice president of enterprise research at ICE, a company that operates global financial exchanges and provides mortgage technology, data and listing services, estimates one of the following needs to happen to make housing affordable again:
Or some combination of the above. Are we pessimistic when we say we don’t see any of the above happening anytime soon? In fact, 8% on rates looks and feels almost inevitable. And, with prices barely going down — and going up across much of the country — we’re setting up to hit yet another nasty level on housing unaffordability. The Bottom Line: We think we’re just being realistic. It’s tough out there. And we can’t help but think back to March 2023 when lashed out on the real estate agents who were telling clients to “marry the house, date rate,” as a reference to buying the house today at a high interest rate and refinancing later at a lower one. At this time in March, rates were at 7%. After a brief drop to near 6%, they have been going up ever since. So much for that advice. |
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