Week Ending in July 12, 2024
University of Michigan Consumer Sentiment for July hit 66.0…The consensus was 67.5, down from June’s final reading of 68.2.
What does it mean – In the same period a year ago, the index stood at 71.5. Burdened by high interest rates, increasing regulation and inflation, consumers are feeling it at the cash register.
Consumers hitting the Credit Cards hard…Consumer credit increased by $11.3 bln in May.
What does it mean – The consensus from Briefing.com and from others was $9.5 bln. This is after an upwardly revised number of $6.5 bln in April. Consumers racked up nearly $4.8 bln. or 73.84% more than in April.
U.S. Government releases 1 million barrels or 42 million gallons of gasoline…Prior to the 4th of July holiday, the Biden administration authorized the government to release 42 million gallons in the northeast to lower gas prices prior to the holiday.
What does it mean – This government loves picking winners and losers. Got to ask yourself why they would only release gas in the NE, specifically from reserves in New Jersey and Maryland that supply Pennsylvania, New York, Baltimore, Delaware, Connecticut, and New Jersey?
Could it be good politics and would significantly affect the inflation numbers that came out this week? Not sure, but one thing is for sure, it temporarily lowered the cost to traveling, BBQing, and enjoying our Nations Birthday in the NE.
First time home buyers are getting older…Due to rising interest rates, regulations, taxes, and inflation, home ownership is getting more and more difficult.
What does it mean – Building is slowing and the costs of material, labor, and building regulations are increasing at the fastest rates seen in many years.
California Dreaming!!
According to the Tenner Center for Innovation at UC Berkley, “Homeownership in California is increasingly out of reach relative to the country: in 2021 the share of adults who own their home in California was just 43.5 percent, more than 15 percentage points lower than the rest of the United States, which is the largest the gap has ever been. In California, the age at which more than half of residents are homeowners is 49; by comparison, across most of the United States that age is 35.”
I guess if your children, family, and friends have already fled CA for the opportunity to chase their American dream, you can now understand why the average age of home ownership in most states is less than 30 and in CA it is now 49.
The greatest declines in homeownership have been among people between the ages of 25 and 45. Between 1980 and 2020, those between the ages of 25 and 35 who owned their home declined from 39.4 to just 15.5 percent over the last 40 years. Among 35–45-year-olds, the share who owned their home dropped from 64.4 to 39.7 percent. That equates to roughly 1,338,510 fewer homeowners aged 35–45 in California due to lower homeownership rates.
As I have said multiple times, CA is the petri dish for stupid ideas. Further pushing the dream of home ownership and self-determination further and further away from the average citizen.
Housing is synonymous with a multitude of issues and just one example created by government agencies and our CA elected leaders. Ask any builder or contractor and they will give you a litany of issues they face from city, local, county and state regulations affecting everything from cost of labor, connecting utilities, codes, changes to plans, you name it. If it moves, goes up, down, sideways or attaches to anything, CA will tax it, regulate it, and eventually destroy it. Then they will pass a new law increasing fees and taxes to fix the problem they created.
That sucking sound you hear. It is the war on water and utilities. Another perfect example of how bad policy destroys economies.
First, CA rainfall is nearly the same on 10 year rolling averages as it was 20, 30, 40, 50, 100 years ago. Rainfall is not much different and the record temperatures that we have recently broke in the last 10 years date back to the 1920’s and 30’s. Makes you think twice about the rhetoric being thrown out by folks on both sides of the arguments. The real issues. Finite resources and more demand than we can afford to build. By opening the border and becoming a sanctuary state, CA has added millions of good folks who we cannot accommodate. CA then went on to pass massive spending bills which increased taxes and fees to build high density housing to house illegal immigrants and homeless at the cost of our citizens. When water and power became an issue, they passed massive regulations and raised water costs for citizens to pay for decisions that actually harm the citizens. To make matters worse they sided with environmentalists to literally destroy dams and water ways to protect frogs, lizards, fish, or some birds. This reduced the ability for the state of CA to store and manage water to meet the demand created by people who cannot afford to pay for it. Further increasing the costs of water and power and putting our state and our citizens in jeopardy financially and physically as they forced rationing of water and power. Reminds me of certain third world countries I have lived in that can’t keep the power on or water in the faucets.
Their solution, more high-density housing further subsidized by the taxpayer putting more pressure on citizens and creating more demands on resources and infrastructure. The best part of this is that now CA has a bill that could become law that will absolutely destroy businesses and your freedom. The question is, how would you like to pay more for your utilities based on your income not what you use? When will they learn?
We have years of history that show this kind of thinking is divisive and has never worked.
Let’s roll America!!
Doug De Groote, CFP®, MBA, CTC
Managing Director
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