#40 – Presidential Market Performance, Q3 Review, Fruit Loops Ban, And The Peak 65 Stat Of The Week

Jeff Lloyd [00:00:37]:
Thank you for that reintroduction, Wes. I appreciate it. And it is great being here. Back with you on Sunday morning, less.

Wes Moss [00:00:43]:
Than one month from the presidential election, we have a new indicator that we haven’t talked about yet. I know we’ve talked about the misery index, and there’s a couple other market statistics that we can call them barometers on which way the election will go. The, we’re going to call this the S and P 500 pre election barometer. Where does it stand right now and what is it, what’s its track record on predicting who wins or loses? Third quarter just wrapped up earlier this past week, so we’ll do some statistics around Q three or the third quarter, as we now are in the fourth quarter of 2024. And in the, it’s been officially fall for a little bit, even though it hasn’t really felt like it. The housing log jam. The housing log jam. What’s happening in the housing market? Are the logs that are damming up the water starting to move? Maybe just a little bit, but maybe not.

Wes Moss [00:01:40]:
We want to look at a couple of economic statistics around existing home sales, mortgage rates and then housing inventory and seed what those cards are showing us. But first, let’s talk about some statistics and listen. This is, again, yet another scary week. They’re almost all scary weeks. We’ve got strikes from Iran to Israel and the Middle east and back and forth from Israel to Iran. Where do we go? It’s a constant state of worry. It’s a constant state of headlines that grab you in. Yes, they’re scary.

Wes Moss [00:02:12]:
And that is the world we live in. And that’s the climate we have to navigate as investors and we have to keep our eyes long term. That as scary as things get and as cloudy as the skies are in any given day, because the sky is always cloudy when it comes to investing, we think it gets better over time. And there’s a lot of people worried about that and counting on it because, Jeff Lloyd, my statistic of the week, we are here in peak 65 2024 is the. It’s the height of the demographic cycle of people turning 65 on any given day. We’ve heard the statistic 10,000 people in North America turning 65 every single day. That’s. It’s not true.

Wes Moss [00:02:55]:
It’s 11,000 people because we’re in the fattest part of the pig moving through the python and we call it peak 65 2024. This. We’re in the. We’re in a record breaking year. 11,000 Americans. This is Americans per day turning 65. It’s a lot of birthday cake. That’s a lot of folks heading to Medicare age.

Wes Moss [00:03:18]:
That’s how many people for the year. Approximately 1.4 million Americans turning 65 this year.

Jeff Lloyd [00:03:25]:
4.1, Wes? 4.1 million. 4.14.1 million.

Wes Moss [00:03:31]:
Did I say another number?

Jeff Lloyd [00:03:32]:
You said 1.4.

Wes Moss [00:03:33]:
Oh, I got it backwards. It’s. Let me take. Put my glasses on. It’s 4.1 million. Just a little bit off there. Poise. To turn 65 this year and every year through about 2027, according to the alliance of Lifetime Income.

Wes Moss [00:03:52]:
Peak 65, silver tsunami. Just a lot of folks thinking about.

Jeff Lloyd [00:03:56]:
That’s over 16 million people. I kind of want to get in the birthday cake business.

Wes Moss [00:04:00]:
Not bad business.

Jeff Lloyd [00:04:01]:
That can be a boom in business.

Wes Moss [00:04:02]:
We had a birthday cake this week. We had a pizza and birthday cake. One of my kids had a birthday. And I guess because it felt like a special occasion, I ate, like, four pieces of pizza, and then I ate birthday cake, and I felt terrible the whole next day. I guess I’m just too old for that. What else, again, in a scary world? Some lighter news that relates back to the economy. And this is just. California continues to deliver.

Wes Moss [00:04:32]:
They just deliver on these ridiculous new laws and new regulations and new. I don’t know what you would call this, but this is what Jeff, Lloyd and I are calling the ban on Toucan Sam. What is that about?

Jeff Lloyd [00:04:50]:
It seems like Toucan Sam is the next celebrity to get canceled.

Wes Moss [00:04:55]:
Yes.

Jeff Lloyd [00:04:56]:
And what are we talking about?

Wes Moss [00:04:58]:
He’s a terrible bird with a. He’s a rainbow beak. I mean, this guy. Come on. What’s wrong with Toucan Sam? He looks friendly to me, but maybe.

Jeff Lloyd [00:05:06]:
Not so much under the surface. When you figure out what he’s selling, it’s almost like, and not to bury the lead here, but the headline we saw is California’s first state to banish fruit loops from school cafeterias. By the way, Toucan Sam is becoming the modern day Joe camel.

Wes Moss [00:05:26]:
That’s right.

Jeff Lloyd [00:05:28]:
Basically selling poison to kids.

Wes Moss [00:05:30]:
That’s all they’re doing. It’s all it is. And it’s essentially California. This is Gavin Newsom signed first in the nation, as California often does, legislation that will prevent public schools of California from serving food dyes that color fruit loops and flamin hot cheetos and other processed snacks. And I think about it, I don’t look, it’s evidently the blue green, yellow red additives that are going to be banned are linked to hyperactivity and ADHD, and you name it and leave it up to California to say no more. Now, it’s not going to be illegal to sell fruit loops in the state of California, but this is a huge step towards removing dyes from children’s breakfast. And I kind of see this. It does bug me when my kids are sitting there in the morning eating pretty much any cereal that tastes good, they’re all there.

Wes Moss [00:06:29]:
It’s like candy, dessert.

Jeff Lloyd [00:06:30]:
I mean, they’re eating a bowl of sugar is what they’re doing. My kids do the same thing. We love fruity pebbles. Cinnamon toast crunch.

Wes Moss [00:06:37]:
Cinnamon toast crunch. Yeah. Might as well just pour a bowl of brown sugar, put a little bit of milk on it. But there is nothing worse, though, when it comes to health. That looks any worse than froot loaves. I mean, it’s like six different, all those different colors.

Jeff Lloyd [00:06:52]:
The milk then turns that, and then.

Wes Moss [00:06:54]:
There’S like a frosting on top of the color. What else is California banned? Well, they have a ban on plastic straws. They have a ban on eating frogs. They have a ban on not allowing custody disputes in courts for your pets. They have a ban on foie gras. If I can even say that, fragois. They have a ban on washing cars if the hose doesn’t have a shut off nozzle on it. I get that one a little bit.

Wes Moss [00:07:21]:
A ban on non water and milk options on children’s menu. They can’t offer on a children’s menu anything but water or milk. You’ve got to ask special requests to get a soda. They have a ban on cursing on golf courses. And I’ll tell you what, if they really were to enforce that, I can tell you that’s a moneymaker.

Jeff Lloyd [00:07:44]:
Sunday afternoons, we play a little bit of golf after the show. If they put a ban on cursing on the golf course, there wouldn’t be a lot of people out there, especially.

Wes Moss [00:07:52]:
On the putting green. Can you imagine? Ban on whistling for canaries before 07:00 a.m. that’s another violation. And this is in I guess the town of Berkeley.

Jeff Lloyd [00:08:02]:
I saw that. What if it’s like your canary? It escapes and you’re trying to like, get it back? You’re not trying to. You can’t whistle for it to get it back.

Wes Moss [00:08:11]:
However, California still allows for. So you’re in a traffic jam and you see one of those Suzuki Kawasaki motorcycles zipping through and you’re parked in California. That’s totally legal. It’s the only state where you explicitly legal for motorcycles just to zip through parked cars on the freeway.

Jeff Lloyd [00:08:32]:
So you can just split those lanes.

Wes Moss [00:08:34]:
No big deal. It’s not against the law. California allows for public nudity in certain areas, medical marijuana for pets. They allow for selling homemade food, adoption of non native exotic pets. You can get married on agricultural land in California. And the list goes on. So bottom line there, of course, no fruit loops, but motorcycles can whiz through traffic jams. California knows, I guess, how to do it and they can.

Wes Moss [00:09:05]:
All that and a twelve or 13% state income tax if you’re making a lot of money in the state of California because the weather is just so good.

Jeff Lloyd [00:09:13]:
I think one of the things that really threw me off from this article, if you’re thinking of maybe all the issues and in the world. In the world, and then you boil it down to like issues in schools, is fruit loops high up there on the priority list?

Wes Moss [00:09:30]:
That’s a great question.

Jeff Lloyd [00:09:31]:
Is that where we need to start?

Wes Moss [00:09:32]:
Let’s focus in on the colored cereal. Too colorful. All right, so we’re in elections. We’re 100 days out for. I’m not 100 days. We’re less than a month. So we’re 30 days out. Less than 30 days.

Wes Moss [00:09:43]:
And we’ve looked at all these different election indicators. There’s a couple that I think stand out and then we’ll get to the barometer that really the market can stand just as a barometer and has over the course of economic history. It is fascinating. If you go back to 1928, if we. So let’s go back 24 presidential elections. This indicator we just call the s and P pre election barometer. 20 of the 24 elections going all the way back to 1928, if the s and P was positive, the incumbent party won. If the s and P was negative, the incumbent party lost.

Wes Moss [00:10:20]:
And this is in a window that the three months prior. So you look at the market from July 31, that summer date until the end of October. We’re not there yet. So we don’t know where this ends up. We’ll talk about where it is today. It’s a very, very accurate predictor. And, of course, there’s some sense to it. If we feel like the world is getting a little bit better, the economy’s expanding.

Wes Moss [00:10:44]:
The stock market, which is something we visually can see. You can’t see the economy expanding, but you can see the stock market. And that then imparts a feeling of good or bad, good or bad. If there’s an economic. The stock market’s crashing prior to election, it’s clearly not good for the incumbent party. So it makes sense that a strong market has helped whoever’s already sitting in office. And if you go back to 19 8488-9296 2000, et cetera, all the way through the most recent election, 2020, it’s a 100% accuracy. So ten out of ten.

Jeff Lloyd [00:11:18]:
Yeah, so the last ten times. So we’re going back 40 years, 1980, if the stock market was up in that three month period, the incumbent party won. If the stock market was down, the incumbent party lost.

Wes Moss [00:11:32]:
1992, market down was in that, again, just the three month window. 1992, the market was down a little over one. It was down 1.3%. And the incumbent party lost. In 2000, down a 10th of a percent. Incumbent party lost. In 2016, down 2.18. Incumbent party loss.

Wes Moss [00:11:52]:
2020, down just a fraction of a percent. Incumbent party lost. Where are we today? Jeff FLoyd we’re not exactly on the flat line, but we’re not dramatically higher at this point or lower. We’re just, we’re just, we want to. Zero is a flat line. Right now. The market’s up around s, and P 500 is up around 3%. Still have a long way to go, so we’re going to keep an eye on that indicator, and we’re going to go to weather traffic as well.

Wes Moss [00:12:22]:
So weather traffic, then more money matters right here in WSB, straight ahead. Good morning, and welcome back to money matters here Sunday morning. Your host Wes Moss, along with co host this morning, Jeff Lloyd, who pulled so much of this election data. So we already know, Jeff, and for risk of repeating this too many times, that almost any political configuration is the word that I think I’ve been missing over the last couple of weeks, I keep using combination, but configuration is a better way to look at this. Again, Democratic House, Republican House, democratic president, Republican Senate, Democratic House, republican president, et cetera, et cetera. Essentially, this litany of configurations have all produced positive returns, in large part in the double digit returns, which, again, goes back to kind of stock market history. If the markets average ten or 11% over time, compounded, it stands to reason a Republican Congress and a democratic president would be up 13 on average. In contrast to that, a Republican Congress, republican president, up 12.9, et cetera, et cetera.

Wes Moss [00:14:00]:
Democratic Senate, Republican House, democratic president averaged a little over 15.5%. We know that almost every combination is going to be okay when it comes to who’s not just in the White House, but who’s also sitting in Congress. Now, the question, though, is, if we go back and look at some other market history around re election years, what does that tell us? And technically, we’re in a reelection year, but you could also make an argument we’re in an open election, but because we were re electing, it was Biden and now it’s his vice president. So it’s a little bit of a gray area.

Jeff Lloyd [00:14:37]:
I’ve talked to some people about that exact same thing this week, and we are kind of in the same camp. When you look at the data, it’s gonna be treated like it’s an incumbent reelection versus brand new to brand new people. It happens so close to the election day. I think when you look back, it is gonna be considered a reelection year for the incumbent party.

Wes Moss [00:15:00]:
So if we go back to the thirties, what is the s and P 500 total return been in these reelection years?

Jeff Lloyd [00:15:07]:
So if you go back to 1944 for a presidential re election for the incumbent party, the s and P 500 has averaged about 15.8% in those years. So in those reelection years, coming back since 1944, up 15.8% and never had a negative year.

Wes Moss [00:15:30]:
If you go from 44 since, there’s never been a negative re election year. And so if the average is close to 15 or 16, we’re a little above that now. So here we are in the. Just beginning the fourth quarter, but we’ve kind of stayed true to that. In fact, the market’s done a little bit better than that so far this year. If you look at the statistics around where we are for the year, the s and P 500, again, up around 20% or so in the first, call it nine months of 2024. That’s the best start to any market year since 1997. It’s the 14th best start to the year, going back to 1928, and it’s also the best start to any presidential election year, at least so far in history.

Wes Moss [00:16:21]:
Of course, time will tell, and our eyes are on the s and P 500 presidential election barometer. We’ll continue to look at that week to week until we get closer, closer to the election. You are listening to money matters, news, weather, traffic. The more money matters. Straight ahead. If you’ve ever done a Jane Fonda workout, or if you remember as a kid, Rocky running the steps. And if Michael Keaton is still mister mom to you, then guess what? It’s officially time to do some retirement planning. It’s Wes Moss from money matters.

Wes Moss [00:17:05]:
Weren’t those the good old days? Well, with a little bit of retirement planning, there are plenty of good days ahead. Schedule an appointment with our team today@yourwealth.com. dot that’s your, yourwealth.com dot. It’s WSB’s money matters with Wes Moss, certified financial planner and chief investment strategist from Atlantis Capital Investment Advisors. Wes talks to you about investing and saving for the future. Good morning and welcome to money Matters here Sunday morning. Your host, Wes Moss, along with co host Jeff Lloyd. Less than a month from the election, and we’re going to talk about the magnificent seven swing states.

Wes Moss [00:17:48]:
Not stocks, but the magnificent, the mag seven swing states. That was your inventory. You came up with that or did you find that?

Jeff Lloyd [00:17:55]:
I didn’t find it, but there was.

Wes Moss [00:17:57]:
You’Re just calling it the mag seven.

Jeff Lloyd [00:17:58]:
There are seven swing states, and it’s the new mag seven. We’ve talked about the mag seven here on the show last couple of years. You know, you got Microsoft, Nvidia, Tesla, Meta, Apple, Google, Amazon. But we’re talking about the new mag seven. The mag seven swing states.

Wes Moss [00:18:17]:
Which, what are the seven states?

Jeff Lloyd [00:18:18]:
Well, we’re in one of them, right?

Wes Moss [00:18:20]:
We’re in one.

Jeff Lloyd [00:18:20]:
So Georgia is one of them, along with Michigan, Wisconsin, Pennsylvania, Arizona, Nevada. In North Carolina, the new mag seven.

Wes Moss [00:18:31]:
So we’ve got the new mag seven. And I think that one of the big takeaways as I’ve researched this particular election is just how close it will likely be, right? I mean, you look at the margin of votes in 2016, it was ultra small, and then it got even more razor thin in 2020, and it could be even more razor thin than it was four years ago. We could get to the point where instead of the nation being decided by essentially a stadium full of folks, it could be as tight as a small venue of folks. We’re talking about 1015 thousand people could decide this election because it comes down to winning one of the mag seven swing states. And if it’s, let’s say Pennsylvania is the state to win, the margin last time for Pennsylvania was something like 0.07 of a percent. It could even be smaller than that. When you look at the numbers, it could be a few thousand people, which is kind of fascinating for a country our size. So that’s where we are.

Wes Moss [00:19:40]:
As far as we all know, this is razor thin when we’re trying to handicap which way we’re going to go here. And really this is just, I think out of economic interest, we’re okay. We know the economy is okay. And the stock market, where we do a lot of research around, has done fine any other under a whole variety of political configurations. However, it is interesting that if you go back over the course of economic history and look at election years, the last ten of them, ten out of ten have followed this indicator by the S and P 500 political election barometer, which is essentially, if it’s up the three months prior to the election, the incumbent party wins. If it’s down, this is again the stock market in totality for the three months leading up. So July 31 through the end of October, October 31 down, the incumbent party loses. And that is, of course, it’s a simple barometer.

Wes Moss [00:20:36]:
But if you think about what goes into moving, that barometer is of course not so simple because it’s a combination of how the economy’s doing, how companies are doing, and how people are feeling. Because so much about how the market is trading is the emotion and the sentiment of the country. So if we’re feeling good, then sometimes that pushes up markets and in reverse, markets are up. We’re feeling a little bit better. You check your 401k statement, hey, this quarter I’m up $10,000 in my 401k. That doesn’t feel bad. You check your four hundred one k and it’s down 5000 or 10,000 or 50,000, whatever the number is. That’s just another data point.

Wes Moss [00:21:15]:
That’s a ding on the sentiment and your sentiment. Yeah.

Jeff Lloyd [00:21:18]:
You open that statement and you see it down, you’re going to be like, hmm, I kind of question the overall health of the economy and who’s running that economy.

Wes Moss [00:21:27]:
Who’s the first person who’s responsible for one k loss?

Jeff Lloyd [00:21:30]:
It’s the, you know, a lot of people just think it’s, it’s the president of the United States. So, you know, I think, or equated back to equate it back to, yeah, Washington. But yeah, if you look at the last ten election cycles going back 40 years, it has a hit rate of ten out of ten stop market up, incumbent party wins down, incumbent parties out.

Wes Moss [00:21:52]:
And we’ll continue to track that here. We’ve got a couple weekends here in the studio along with you until we get to the, until we get to those results. How about the results from, and we’re going to get to housing in a minute. I’m excited to talk about what starting to look like. The housing log jam. Unjamming. What’s the opposite of a log jam? I guess a free flowing log release. It’s a free flowing dam.

Wes Moss [00:22:18]:
I always think of Niagara Falls. We’re not there yet. The housing market is still totally jammed up. It’s got logs that are blocking everything that looks like at least we’re in the early innings of that. Maybe changing. It’s going to depend on interest rates. We’ll get to that. But when it comes to how this market fared in the first three quarters, which just ended this past Monday, Jeff Lloyd, how did we do for the major averages?

Jeff Lloyd [00:22:45]:
Yeah. So through the first nine months of the year, like you said, it was the 14th best stock market performance going back to 1928. And the first nine months, you had the s and P 500 up almost 21%, the Dow up about 12%, and the Nasdaq up over 21%.

Wes Moss [00:23:06]:
I think it’s still a pretty big discrepancy between the Dow and the S and P 500. But what is, I’d say, more encouraging than that is this theme around broadening? What does broadening mean? Why does it matter? It matters because in 2023, even though the S and P 500 was up a ton, it was because of the performance of not the swing state mag seven, but the companies that were in the mag seven. And they did so well, and they’re so large and have an outsized impact on how markets do. It really powered the market, and to some extent, the worry around that is that you get too narrow. If it’s only seven horses out of 500 pulling the wagon, that doesn’t seem as healthy as 250 horses out of 500 pulling the wagon. And we talked about how 493 of the 500 companies were just kind of sitting on the bench and nothing performing. And that really has changed in 2024. And I would say it’s a healthier market, particularly if you’re a diversified investor and you have, if you’re not just s and P 500 and you’ve maybe focused a little bit more on dividend companies, maybe the most shocking statistic of this year, after an AI fueled world in 2023.

Wes Moss [00:24:23]:
Now, and this is at one point this year, not too long ago, the number one performing sector in the United States was not technology, wasn’t biotechnology, wasn’t healthcare, wasn’t financials. It was utilities, utility companies, good old fashioned. What do they do? They just same thing every day. They create power. They create power and we know that there hasn’t been a whole lot of growth in energy consumption in the United States because it’s a very steady usage, barely moves. Well, it’s moving now because you could also look at utilities as the second derivative of the boom in artificial intelligence data centers, the new need for power here in the United States. And I think markets have woken up to this in 2024. If I go back and look at S and P 500 and go back over the past year, there was a period of time, and this is called in the spring of 2024, where you are still seeing huge outperformance for the tech heavy S and P 500 relative to the equal weighted index relative to a dividend grower index, relative to a dividend aristocrat index.

Wes Moss [00:25:33]:
The S and P was just trouncing those other indices up 15% or more relative to these other indices today. If you go back over the last twelve months, they’re all very close. S and P 500 is up about 35 over the past year, not year to date, but over the past twelve months. And if you look at one of the dividend indexes that we track is up 32% for the year. So it’s still that theme of the billion dollar companies have been playing catch up to the trillion dollar companies, and we’ll see if that continues. Now we turn towards housing. I wanted to ask you this question, Jeff Floyd. I know we had been talking earlier this week about Jerome Powell and what he’s been saying about Fed cuts, and it goes back to rates.

Wes Moss [00:26:23]:
What was kind of his message this week?

Jeff Lloyd [00:26:26]:
His message this week was basically like, you know, they had just cut 50 basis points, but he’s basically saying like.

Wes Moss [00:26:33]:
Half a percent, half a percent.

Jeff Lloyd [00:26:35]:
He’s basically saying like that that isn’t necessarily going to be the norm every time the Fed meets or makes a decision. In fact, he said the Fed is not on, quote unquote, not on any preset course. So you have all these like market expectations for future rate cuts. Is it going to be 50 the next meeting? Is it going to be 25? And basically, you know, Fed Chairman Jerome Powell reiterated that they’re still going to be data dependent and there’s no preset course on future rate cuts.

Wes Moss [00:27:05]:
As we stand here today, if you look at expectations for where rates will be, if you go out to May of 2025, so that’s, call it five, three, eight months from now, the marketplace and again is saying that the highest probability is for rates to be in the three and a quarter to 3.5 range. That’s another full one and a half percent below where we are today. Now, who knows if these rate cut expectations come to fruition, but where it matters? And again, even though we know that the Fed funds rate is not what mortgage rates play off of, they play off the ten year treasury. That’s ironically gone up a little bit. Ten year treasury rates around 3.8. Even since the Fed cut rates, it’s mostly because the market was. Rates already came down prior to the cut. It was anticipating that.

Wes Moss [00:27:55]:
But we know that over the course of economic history, mortgage rates are typically one and a half to 2% above the ten year treasury. So if the treasury gets down to three and a half, you’re going to have now, we don’t know if it’ll get there or it could be even lower than that. Two and a half or three. Let’s get say it gets to 3%. That means you could see a mid to low 5% mortgage rate. Interestingly, you found this study this week from the Home Trends Institute, is that, and they asked Americans, what’s the highest mortgage rate you’d take on for buying another home? And as you can imagine, 97% of folks said we would not take a mortgage at 8%. Only 3% of people said they would do that. Only 13% of folks said that they would do it at six and a half.

Wes Moss [00:28:50]:
And that’s about where we are today. We’re about 6.1 as of the end of this past week. So we’re already in a range where people are saying, no, I’m not taking a mortgage out that’s that high. But I’m sorry. We’re at about 21% of folks where we are right now, 6% to six and a half. So only 20% of America is comfortable buying a house today where rates are. But there’s a, quote, magic rate, jeff, and what is the magic rate?

Jeff Lloyd [00:29:16]:
Yeah, that magic rate is in between five and five and a half percent. And that’s kind of one of the things that we had talked about. Like, if you see 30 year mortgage rates creep into that 5% range, then I think you’ll see that log jam starting to unwind.

Wes Moss [00:29:33]:
So about half of people in the United States say that a rate of five to five and a half is okay, whereas today only about 20% say that they’re comfortable with it. So you get half of the nation comfortable with mortgage rates. And again, if we have a sustained 3.5% ten year treasury rate, add two to that, that’s five and a half. We could get there then you could start to see some inventory build. And if inventory builds, it means there’s more homes to buy. Rates come down, more people ready to buy. That gets rid of the log jam. We’ll go into some of those numbers when money matters returns.

Wes Moss [00:30:11]:
Weather, traffic, then more money matters right here on WSB, straight ahead. Good morning. Welcome back to money Matters here Sunday morning. Your host Wes Moss, along with Jeff Lloyd here in studio. Jeff, we were talking about us housing. We think of it as this logjam, and it’s in really every how, all so many different housing indicators show the jam up, if you will. If you look at housing inventories, normally from 2005 through 2012, we had three and a half to 4 million homes that are sitting there on the market ready to be bought. If you go back pre financial crisis, even back to the eighties and nineties, you had at least 2 million in inventory ready to be sold or ready to be purchased.

Wes Moss [00:31:27]:
And since COVID and since rates went up dramatically and people locked in lower rates, the inventory has shrunk to well under a million. It got below 900,000, 900,000 total homes and inventory in the United States. Sounds ridiculously low. Now, as soon as we have seen mortgage rates go down over just really the last couple of months, you’ve seen that housing inventory number turn up a bunch. Now we’re up to 1.3 million. So that’s a big difference from 900, it’s 400,000 more homes. And a lot of that has come at the hand of lower interest rates of people saying, okay, I’m okay to go get another house. Even though the rate’s higher than I have, it’s still kind of doable.

Wes Moss [00:32:16]:
I can still handle it. What we haven’t seen yet is the existing home sales tick up all that much just yet. But we’ve got to see inventory go up likely first, at least. I see that started now. If we see mortgage rates stall out and stop coming down, remember we were at 7.8%. Was the average 30 year fixed this past week, we got all the way down to almost six. It ticked up to about 6.1 towards the end of the week. But I think if you see that continue to come down, it pulls the levers.

Wes Moss [00:32:44]:
We need more inventory, more people saying, yes, I could move. And then you could see existing home sales tick up. So we’ll say if we’re in a housing turnaround, where we get back to normal housing activity, a couple million homes in any given year, if we’re in that turnaround, we’re still in the, we’re still just in the top of the first inning is how I’d look at that, maybe the bottom of the first.

Jeff Lloyd [00:33:09]:
Which is why I like that chart that we talked through so much. What’s the highest mortgage rate you take on for buying a home? That sweet spot, that magic mortgage rate right in that five to five and a half sweet spot. And if we keep, that’s what we’ve.

Wes Moss [00:33:23]:
Been saying here, but we didn’t have a study tied to us. So, so this is a study that confirmed what we’ve been saying here on money matters. By the way, if it’s under 3100%, of course, 100% of Americans say that they take that mortgage rate and go buy a home if you’re in the four. So here’s another. This is an interesting range. In the four to four and a half range, 71%. Americans said that they’d go ahead and buy a home at that level. Well, it’s not impossible that we get back to that as well.

Wes Moss [00:33:52]:
So we’ll see. We will see where we go. And do we get some loosening up in the housing market. Be good for the economy. Could be inflationary. But that’s a story for another day. Jeff Lloyd, as of today, if you’d like to just find Jeff Lloyd, it’s easy to do. So you can find me and Jeff Lloyd same place.

Wes Moss [00:34:12]:
Yourwealth.com. that’s your wealthyourwealth.com. thank you for joining us here on money matters here on this Sunday morning. Have a wonderful rest of your Sunday.