What I’m Reading
Bad Vibes: Homebuilder sentiment dropped 12 points to 55, according to a monthly survey from the National Association of Home Builders, the largest drop in the survey’s 37-year history with the exception of April 2020. Sentiment is also declining at a far faster rate than it did when the housing bubble popped. CNBC Starts are about to hit a wall and layoffs are coming.
Easing Up: The price of construction materials was still rising in June, but there are indications that inflationary pressures on at least some construction inputs are starting to ease, according to Associated Builders and Contractors. Bisnow With builder sentiment in the toilet, an easing in cost pressures here seems inevitable.
Over the Falls: Companies that promise groceries delivered in 15 minutes surged during the pandemic, but are now in full on retreat. Wired These companies are hemorrhaging cash and valuations are off massively. The unit economics here never made sense and this was inevitable, IMO.
Hitting a Wall: We are seeing a clear slowing in the housing market, with more price reductions, more inventory, spiking cancellations and fewer sales. It will take some time to see the impact on house price growth, but that is coming too. Calculated Risk
Healthy Reading: A recent report from RealPage showed that market-rate residents nationwide are spending 23.2% of their income, well below the oft-quoted 33% affordability ceiling. The 23.2% measure is modestly higher than pre-pandemic norms but indicates that wage growth is largely keeping track with rent increases. Globe Street
Chart of the Day
Holy shit. This is anything but inflationary, btw.
Source: Alpha Beta Soup
WTF
Sour Grapes: A “heavily intoxicated” man was arrested for calling 911 to report that his girlfriend “wished to eat Sour Patch Kids” because Florida. The Smoking Gun
Feeling the Urge: A pastor was arrested for masturbating on a Starbucks patio – for the second time – because Florida. WFTV 9
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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