Welcome to Location Strategy Chartbook, Texas’ only weekly newsletter dedicated to the homebuilding and land development industries. We will keep you updated on the economic news you need to know. If this is your first issue or someone has forwarded it to you, I’d encourage you to subscribe and to keep reading. We won’t put you on a marketing list, and our newsletter is always free.

For a brief introduction to our readers, Scott Davis is the president of Location Strategy LLC. We provide fast, smart, affordable Texas-based consulting solutions for real estate clients.

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LOCATION STRATEGY CHARTBOOK

Morningstar expects economic growth to trough next year but rebound by 2025 alongside lower inflation.

Broadly, higher interest rates will put pressure on business investment over the next decade.

US household formation projections show household growth slowing meaningfully after 2026.

As stimulus programs end, fiscal policy is now a drag on growth.

The US federal budget - massive increased borrowing will be a further drag on economic growth going into 2024.

Economic uncertainty also tends to rise going into US presidential elections.

The Sahm Rule, which has no false positives, "posits the start of a recession when the three-month moving average of the unemployment rate rises by a half-percentage point or more relative to its low during the previous 12 months." Current reading: 0.33.

High continuing unemployment claims tend to coincide with recessions.

Tight bank lending standards indicate high recession odds.

During the week beginning March 13, 2023, the FHLBanks funded $675.6 billion in advances, the largest one-week advance volume in FHLBank System history.

The Fed's latest loan officers’ survey points to improving C&I lending standards and loan demand.

Net percentage of banks reporting stronger demand for mortgages and home equity loans - is down but off of historical lows

Credit card delinquency by age group

The report noted a big jump in credit card delinquency, particularly in the 30-39 year old age range.

The continued rise in credit card delinquency rates is broad-based across area income and region, but particularly pronounced among millennials and those with auto loans or student loans,” Lee said.

Homebuilders are increasingly offering incentives.

Cash purchases comprise an increasing share of housing transactions.

Luxury homes are outperforming the broader housing market.

Unlike the broader market, luxury home listings are up on a year-over-year basis.

Higher-income households have also been driving US spending growth.

The sharp pullback in mortgage rates …

… resulted in a modest gain in mortgage applications.

Don’t look now - arabica bean inventories just hit a 24 year low.

Coffee futures rose 4% on the news, and may be primed for future increases.