The Most Splendid Housing Bubbles in America, November Update: Prices Drop in All 33 Big Metros, Most in Austin, Tampa, Dallas, San Antonio

By Wolf Richter for WOLF STREET.

The dynamics in the housing market are now sort of messy: The lowest demand for existing homes since 1995 has led to rapidly rising active listings, as buyers are on strike because prices are too high. Homebuilders have been building single-family houses at breakneck speed, creating the biggest pile of unsold completed houses since 2009, and they’re throwing around massive incentives, including mortgage-rate buydowns, to move the inventory.

Mortgage rates, which have risen on renewed inflation fears since the Fed started cutting rates, are back to the old normal, before the era of QE started in 2008, and Fannie Mae’s CEO said that people should get used to them. To top it off, renting a nice single-family house is now far cheaper than buying an equivalent house after the mindboggling spike in home prices and the now old-normal mortgage rates.

So, prices in many major metropolitan areas, even in San Diego and Los Angles, have started to sag.

Three Rules to Prepare for the Next Meltdown

By Porter Stansberry

Government deficits are soaring like never before...

As of mid-September, this year's budget deficit represented nearly 6% of U.S. gross domestic product ("GDP") – a level that's unprecedented in U.S. history, outside of wartime or a severe economic downturn.

In other words, the U.S. government is spending as if we're already in a crisis... before any crisis has even begun.

Meanwhile, the Federal Reserve is now aggressively cutting interest rates for the first time since the COVID-19 lockdowns... despite official inflation measures remaining well above the central bank's official 2% target.

I'm no longer sure whether we'll imminently experience a recession and stock market meltdown... or an inflationary boom and stock market melt-up, followed by a severe downturn.

As such, I believe investors should do their best to be prepared for either outcome.

Auto-Loan Balances, Burden, Subprime & Prime Delinquency Rates, and Subprime Dealer America’s Car-Mart in Q3 2024

By Wolf Richter for WOLF STREET.

Total balances of auto loans and leases for new and used vehicles rose by 1.1%, or by $18 billion in Q3 from Q2, and by 3.1% year-over-year, to $1.64 trillion, according to data from the New York Fed’s Household Debt and Credit Report.

But the 3.1% year-over-year growth rate was the second-smallest since Q1 2021, behind only Q2 this year (2.8%) and the third smallest since Q4 2018.

One of the reasons balances grew at a relatively slow rate is that more people are paying cash for their vehicles due to the higher interest rates. For new vehicles, the share of cash purchases rose to 20% in recent quarters, from 18% in Q1 2022. For used vehicles, the share of cash purchases rose to 64%, from 59% in Q1 2022, per Experian data. We’ll look at other reasons for the slower increase in a moment.