Monday's Scoop: Snooze☀️

Hey friend - hope you had a great weekend. Catch up with our Weekly Scoop!

Here’s what you need to know today to inform your work, spending, and investments…

1. New home prices have come down despite a significant shortage.

2. The commercial property market is in trouble.

3. 2023 had the most worker strikes in over two decades.

Unemployment Rate: 3.7%
^{Still near the lowest rate in 50+ years}

The labor movement had a historic 2023, witnessing more worker strikes in over two decades. The Labor Department reported 33 major work stoppages last year, defined as involving more than 1,000 workers and skipping at least one shift. That’s nearly double the average of the past 20 years. A total of 458,900 workers participated in strikes demanding better pay, benefits, and working conditions. The vast majority were in the education, healthcare, and information services sectors.

30yr Mortgage Rate: 7.1%
^{That’s up from 6.6% a year ago. (MBA)}
Median Existing Home Price: $379,100
^{That’s up from $361K a year ago. (NAR)}

Prices for brand-new homes have continued to fall despite a housing shortage. The Census Bureau reported the number of sales of new homes in the US increased by 1.5% in January but remained well below typical activity levels in the real estate market. Mortgage costs near multi-decade highs have slowed demand, but limited supply has kept home prices from falling much. The median price of a newly built home was $402,700, down 2.6% from a year ago. New home sales only account for about 14% of the real estate market, but existing homeowners are reluctant to sell, hoping to hang on to the much cheaper mortgage rate they locked in years ago.

The commercial property market is in trouble. With fewer people in the office and borrowing costs nearly double what they were a few years ago, commercial property owners struggle to manage their debt. Foreclosures rose 17% in January from the month before and were roughly double what they were a year ago, according to a report from Attom. Falling property prices and foreclosures could have adverse ripple effects through the banking and real estate sectors.

The Market: ⬇️ -0.4%
S&P 500: 5,069.53
1Mo: +3% | 1Yr: +27% | 5Yr: +81%

The market took a break from its AI-fueled rally to start the week. Companies have been delivering better profits than expected, mostly from cost cuts, but not dramatically better. Investors are beginning to question the valuations.