Discussing the latest reports on home prices, the economy, consumer confidence and how the CFPB is no longer a friend for consumers!
US Home Prices Increase Again
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in October, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.0%, up from 5.7% the previous month. The 20-City Composite posted a 6.4% year-over-year gain, up from 6.2% the previous month.
Remember BOTH of these reports are talking about the entire US and do not reflect what is happening in every local real estate market. For example, in Anderson County SC we can compare prices during October 2017 to October 2016:
Of course, this is for all of Anderson County and will not tell you what is realistic or possible for a specific home. If you have any questions about real estate in Anderson County, please contact me!
Fifth District Service Sector Firms Reported Continued Growth in December
From Richmond Fed:
Fifth District service sector firms reported continued growth in December, according to the latest survey by the Federal Reserve Bank of Richmond. While firms saw increases in both revenues and demand, these gains were observed by a smaller portion of both retail and services firms than in November.
Indicators of employment and wages also decreased while remaining positive. However, the employment index for retail firms inched up from 30 to 31. Retail firms reported increased growth in shopper traffic, big-ticket sales and, most notably, inventories, as the inventories index jumped from 28 to 44.
Prices in the overall service sector rose at a slower pace in December. Service sector firms expect prices to increase at a slightly quicker but still modest pace over the next six months.
Not great but not bad either so we will call it a win.
Fifth District Manufacturing Firms Reported Moderate Growth in December
Also from Richmond Fed:
According to the latest survey by the Federal Reserve Bank of Richmond, Fifth District manufacturing firms saw moderate growth in December. The composite index moved down from its record high November reading of 30 to 20 but remained positive, indicating continued growth. The decrease in the composite index resulted from declines in the indexes for shipments and new orders; but the third component, employment, increased in December. Indicators of wages and inventories also rose. While most other indicators of current conditions moved lower, they remained positive with the exception of the index for backlog of orders, which fell from 21 to −4.
Manufacturing firms remained optimistic, as all expectations indicators increased except for vendor lead time, which dipped from 10 to 7.
District manufacturing firms reported continued price growth in December, although this growth slowed in both prices paid and prices received. However, firms expected an increase in price growth in the coming six months.
Another positive report for the Fifth District. Remember, South Carolina is in the Fifth District.
Consumer Confidence Decreases
Consumer confidence continued to slowly sink in December, with most of the decline among lower income households. The extent of the decline was minor, with the December figure just below the average for 2017 (95.9 versus 96.8). Indeed, the average in 2017 was the highest since 2000, and only during the long expansions of the 1960’s and 1990’s was confidence significantly higher.
The recent strength was due to the second highest assessments of current economic conditions since 2000. This strength was offset by a slight increase in uncertainty about future economic prospects. Tax reform was spontaneously mentioned by 29% of all respondents, with nearly an equal split between positive and negative impacts on economic prospects. Party affiliation was the dominant correlate of people’s assessments of the tax legislation, with the long term economic outlook the most negatively affected.
Buying plans for durables and vehicles remained unchanged at favorable levels. Most consumers will know more about the revised tax code when the new paycheck withholding amounts take effect in early 2018. While the mostly small gains in take-home pay may not spark an uptick in optimism, those gains would act to dampen any renewed pessimism. Overall, the data indicate that real personal consumption expenditures will expand by 2.6% in 2018.
Not really surprising that how people feel about the tax reform is spit along party lines. I would be interested in how more independents such as myself feel about tax reform.
You’re On Your Own Now
From The Reformed Broker:
The Consumer Financial Protection Bureau has undergone a bit of a makeover. It’s no longer actually meant to regulate the financial services industry as it pertains to the treatment of Main Street – it has been transformed into an advocacy for the banks, credit card issuers, insurance companies, mortgage originators and brokerage firms against what it sees as overzealous regulation and job-killing oversight.
That new language in the mission statement – the stuff about “outdated, unnecessary, or unduly burdensome regulations” – could have been written by the corporate counsel of a large Wall Street bank. In fact, I’m almost certain it was. It’s a skeleton key that will unlock every cage in the zoo and unleash all manner of beastliness into the aether. The restraints are coming off and human nature / industry incentives will do the rest. Do you think it’s an accident that the financial products with the highest embedded compensation for the sellers are the products that do the most damage to the customer?
Guess who’s going to suffer in the end, regardless of economic growth or shareholder returns in the short-term…
The change in the mission statement is a huge indicator of what we can expect now from an agency that used to protect and help consumers…
That is it for today! If you enjoyed this post please hit those share buttons! And subscribe so you never miss another post!