At a time when many economists are saying the federal rate hikes aren’t coming fast enough to slow down inflation, analysis of the housing market is decidedly mixed. One thing is clear, most expect rising mortgage rates to boost inventories, which remain historically low.
In a notable exception, Ian Shepherdson, chief economist and founder of research consulting firm Pantheon Macroeconomics, cautions that sellers may pull listings or decline to put their home on the market, out of fear of being the last person trying to sell in a “falling market” and that demand will drop as affordability concerns grow more pronounced.
At this volatile time, when we rightly consider the emotions of frustrated buyers, we are reminded that brokers and agents should guard against burnout.
In mixed economic news, as COVID-19 has lessened its grip, older Americans, whose wealth increased over the past two years, may help pump cash into the economy. Older Americans are both ready to “get back out there,” with travel, dining out, and entertainment. They also are proceeding with projects like new kitchens and pools.
Even so, much is wait and see as a new round of COVID-19 outbreaks are popping up around the world and the war in Ukraine enters its second month. Concerns about wheat and other grain costs are warranted, especially at a time when food prices are affected by inflation.
University of Illinois agricultural economist Scott Irwin says it is unlikely that more than 30% of Ukraine’s cropland, equivalent to the farmland of Illinois and Iowa combined, will be planted for corn, oilseeds, and more this spring, given diesel shortages, occupied ports, and the business risk in planting crops when the country’s future is unclear, reports Barron’s.
Looking at other industries, we continue to see the byproducts of innovation as the development of electric vehicles affects both the creation of car batteries and tires. Goodyear looks to benefit from making tires, but the need for large lithium batteries has created a scramble to obtain raw materials. Global demand for EV batteries in 2021 was 350 gigawatt-hours and experts predict demand could increase to 2,000 gigawatt-hours by 2030. According to the U.S. Department of Energy, 1 gigawatt is equivalent to 2,000 Chevy Corvette Z06 engines or 9,090 Nissan Leafs.
Finally, among industry game changers, we have Tomo, the fintech launched last year by two former Zillow executives, which announced a $40 million Series A funding round that more than doubles its valuation to $640 million. Tomo, operating in seven states including Florida, has the goal to “be the best at purchase mortgages,” by catering to homebuyers and agents with mortgage preapprovals in hours, guaranteeing on-time closings, and matching competing lenders’ rates.
And now relative newcomer Compass has topped Realogy, the perennial top dog, as the biggest brand in the industry.
Our global economy today sparks exciting innovation and leads to the real worries by individuals and families. Seeing the connections and addressing the needs of our industry is what GTR is here to do.
