Location Strategy Chartbook 101924

The chart below compares the yield curve prior to the Fed rate cut (blue line) versus the yield curve today (red line). What you'll see is that the curve is starting to slowly disinvert with rates for terms shorter than 1-year decreasing, and rates for terms 1-year or longer increasing.

There has been a slowdown in the growth of global trade. “The wave of China-driven trade globalization that we saw in the decades leading up to the Great Financial Crisis peaked in 2008,” Goldman Sachs Patrick Creuset says. “But it has not really gone into reverse.”

Creuset's work analyzing trade data shows that overall volume continues to grow modestly and that the shipment of goods around the planet is increasingly complex. Multi-sourcing supply chain strategies, trade barriers, and geopolitical frictions can all make trade more intricate and difficult. Those factors are creating opportunities for logistics and shipping companies, Creuset says.

Bank of America internal data: credit card balances per small business client are up more than 20% compared to 2019 average levels as of September and appear to have been slowly increasing

Average small business credit card monthly utilization rates have surpassed 2019 levels and are approaching a decade-level high

“Millennial retail spending is far above other demographic groups in their study,” CIBC economist Ali Jaffery highlighted in a note Thursday. “Growing research shows they are open to spending a bit more on discretionary items than their parents, favoring leisure and more work-life balance which also adds up to more spending.”

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2024 shows mortgage applications for new home purchases increased 10.8 percent compared from a year ago. Compared to August 2024, applications decreased by 6 percent.

"Applications for new home purchases declined in September, consistent with seasonal patterns, and continued to run ahead of last year's pace,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “New home sales continue to be an appealing option for prospective homebuyers as mortgage rates were lower during the month and more newly built options have been coming onto the market. The FHA share of applications was elevated to almost 29 percent, a sign that first-time buyers are active.”

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 680,000 units in September 2024. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

There is a very high number of unsold built homes, and the record pipeline of homes under construction is now falling. However housing starts and permits are currently quite low which for developers means there is an opportunity in a few years when their projects come to market

Multifamily deliveries the past few years have led to downward pressure on rents. However starts trail completions are record levels which means an opportunity for multifamily developers looking to deliver units in the coming years.

Vermont homeowners tend to pay the least, at an average annual rate of $918, whereas Florida homeowners pay the highest—at nearly $11,000 annually.

“The states with the highest home insurance costs are prone to severe weather events,” the Insurify report explains. “Florida, Louisiana, Texas, Arkansas and Mississippi are vulnerable to hurricanes. Texas, Colorado and Nebraska face a growing wildfire risk. Nebraska, Texas and Kansas are at high risk for tornadoes, being located in an area nicknamed ‘Tornado Alley.’”