Location Strategy Chartbook 081024

Markets are pricing in additional rate cuts across most advanced economies for this year.

“A financial conditions unwind could contribute to slowing momentum in the economy and tilt outcomes towards a recession,” Deutsche Bank’s US economists led by Matthew Luzzetti and his colleagues wrote. “Whether markets stabilize or extend these moves could prove important for determining the economic endgame.”

While unemployment is ticking up, residential building construction employment just hit a new cycle high

There are no obvious signs of a surge in joblessness in Bank of America internal deposit data on households receiving unemployment income, though there was a small rise in the YoY growth rate of households receiving unemployment income in July 2024 across income cohorts

For 12 months the U.S. unemployment rate has been creeping up on a year-over-year basis

11% of credit card balances in the US are now 90+ days delinquent, the highest since 2012.

Other consumer trends in spending and savings from the BofA Institution

Fewer households are moving between cities. In the second quarter of 2024, moves across cities fell 4% year-over-year (YoY) after a 15% YoY decrease this time last year. Those that are moving, however, are skewing towards Gen Z and lower-income households, likely as more households move out of necessity as opposed to choice.

According to Fed of St. Louis estimates, 92% of all mortgages in the US are fixed-rate loans. While they're not paying more in their fixed rate mortgage, their property taxes and insurance are increasing.

Higher population growth areas are seeing the most increase in cost.

Where are people moving to and where are they leaving? Any of these cities surprise you?

Fannie Mae and Freddie Mac are preparing to impose stricter rules for commercial-property lenders and brokers, following a budding regulatory crackdown on fraud in the multitrillion-dollar market.

Lenders would have to independently verify financial information related to borrowers for apartment complexes and other multifamily properties, according to people familiar with the preliminary plans.

Additionally, lenders could face tougher requirements for confirming whether a property borrower has adequate cash and verifying their source of funds.

The new rules might also require lenders to complete due diligence on the appraised value of a property, by evaluating its financial performance, for example, these people said.

US 30-year mortgage rates plunged last week by the most in two years, reaching their lowest level since May 2023 and sparking a surge in refinancing applications.

The contract rate on a 30-year fixed mortgage declined 27 basis points to 6.55% in the week ended Aug. 2, according to Mortgage Bankers Association data released Wednesday. The rate on a five-year adjustable mortgage plummeted 31 basis points to 5.91%, the lowest this year.

An index of refinancing jumped nearly 16% last week to a two-year high of 661.4. Mortgage applications to buy a home increased 0.8%, the first advance in a month. The overall index of applications, which includes the two, climbed 6.9% last week to the highest level since the start of the year.