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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
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Government surveys that track the economy are failing. Budgets are shrinking, people are skipping surveys, and economic data we rely on is becoming less trustworthy. This is a big deal—because when the numbers are wrong, decisions that affect markets, businesses, and everyday life go wrong, too. Here’s what’
The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
Why are homes so expensive nowadays? It ties back to the 2008 recession, and we're dealing with a lasting impact on homebuilding, material costs, and labor shortages.
Remember 2008? Can't say I remember—I was just 4 years old at the time, and my biggest concern was snack time. Anyhow, here's a quick debrief on it:
- Market Crash: The market tanked, leading to a massive drop in home starts. Single-family housing starts between 2010 and 2019? Just 7.8 million compared to 12.3 million in the 2000s. That’s like sharing half of your pizza with the Dominos delivery driver – just not enough to go around.
- Labor Shortages: Construction lost 1.5 million jobs between 2005 and 2010. This year, we're still short 500k workers. No wonder builds are taking forever.
Not only that, more hits kept coming long after the initial crash:
- Increased Material Costs: Lumber prices have been on a rollercoaster. At their peak in 2018, prices shot up 63%, adding thousands to home prices. Recently, they've been falling, due to existing affordability issues with interest rates and construction worker wages
- Regulatory Burdens: Builders got slammed with more regulations. Nearly a quarter of a new home’s cost is due to these rules. That’s like adding extra fees for breathing
- Limited Access to Land: Good luck finding land to build on. Almost 60% of builders said land supplies were low or very low in 2019. Today, the Wells Fargo Builder Confidence Index is at lows similar to March 2020.
All these problems mean one thing: homes are expensive. Affordability has tanked. In 2012, about 79% of homes were affordable for the typical family. In 2023, that dropped to 16%.
So, what can we do about it? Here‘s a couple of ideas:
- Policy Improvements: We need to cut the red tape and lower costs for builders. Helping builders will get more homes on the market.
- Innovations in Construction Methods: Think modular or pre-fabricated homes. It sounds gross, but it could work for the time being. Canada has been doing a similar strategy.
More factors affecting affordability include tight lending conditions and low resale inventory.