Final Weeks of Summer

Home Prices
In June, home prices continued to climb, with the S&P CoreLogic Case-Shiller national home price index rising 5.4% annually, though this marked a slowdown from May’s 5.9% growth. The 20-city and 10-city composite indexes also saw gains, with New York leading the pack.

While the market is expected to cool down heading into fall, a major price drop in 2024 seems unlikely. Looks like even in a cooling market, home prices are still as stubborn as a teenager who refuses to clean their room! Maybe buyers are waiting for a “Black Friday” sale on houses—any takers?

Homeowners Outpace Fed Rate Hikes
Low-cost, fixed-rate mortgages have given U.S. consumers an extra $600 billion in spending money since 2022, cushioning the impact of the Federal Reserve’s interest-rate hikes. This extra cash, nearly 2% of all personal consumption, has kept demand strong despite the Fed’s efforts, and may make it harder to stimulate the economy with future rate cuts.

The Fed’s rate hikes have unintentionally hit renters harder, as homeowners enjoyed their locked-in rates. Looks like homeowners are living the good life, while renters are left wondering if their rent payments come with a side of gold leaf! And with all this extra cash floating around, maybe the Fed should start selling “I survived the rate hikes” T-shirts

Congress Dangles Housing in the Deep End
Homebuyers eagerly awaiting a Fed rate cut in September might face another hurdle if Congress doesn’t reauthorize the National Flood Insurance Program (NFIP) by September 30, which could delay or block home sales and mortgage refinances in flood-prone areas. Without the NFIP, many would struggle to find flood insurance, as private options are scarce.

This could create chaos in the housing market, especially with 4.7 million policies and $1.28 trillion in assets at stake. Looks like Congress might be playing a game of “Flood Insurance Chicken”—who’s going to blink first? And with the NFIP’s messy finances, it’s like trying to patch a leaky boat with duct tape.