Tesla Inc (TSLA)

[jbsliverer]

It's called a housing bubble, even though many won't admit it, until it crashes. Interest rates increasing and inflation has a big effect on abilities to buy or live in a home, especially with an overpriced housing market (taxes have also been increasing with the exuberant home prices).

Yea, there's no recession going to happen, r...i...g...h...t. Google; water shortage and it's economic effects to so many things, especially in one of our main agricultural areas. Decreased ability to produce energy due to low water levels, creating higher utility costs for millions. Heat waves coming, along with Putin's War on Ukraine creating high demand for LNG and soring prices in energy. Lack of fertilizers (and water) lowering yields in our food supply raising prices there. Covid is not done with it's expenses, ignored, but reality still bites. Fires, extreme weather events increasing reconstruction and insurance costs, and material shortages.

On and on, no fed action is going stop what's coming, their only goal is to "soften the landing". Irrational exuberance has been going on in the market for some time, there always is some point for a major correction to happen, the longer it doesn't, the harder the correction. Don't care if it's called a "recession" (until it is), it's still going to be a very reduced disposable income for most, and not enough for just the essentials for many, and it's going to hurt. To many, it's hurting now. We've been eating cake for quite a while, at some point the baker got to be paid.

Jan 31, 2022, the ratio was 7.72. It's higher now.
Home Price to Median Household Income Ratio (US)


Interpretation
Historically, an average house in the U.S. cost around 5 times the yearly household income. During the housing bubble of 2006 the ratio exceeded 7 - in other words, an average single family house in the United States cost more than 7 times the U.S. median annual household income.
The Case-Shiller Home Price Index seeks to measure the price level of existing single family homes in the United States. Based on the pioneering research of Robert J. Shiller and Karl E. Case the index is generally considered the leading measure of U.S. residential real estate prices. The index has a base of Jan 2000=100 and is multiplied by 1800 in order approximate the Average Sales Price of Houses Sold for the United States.
According to Mike Maloney this ratio is heavily influenced by interest rates. When interest rates go down the affordability of a house goes up, so people spend more money on a house. Interest rates have now been falling since 1981 when they peaked at 15.32% (for a 10-year US treasury bond).

Data Sources
Recent data
Federal Reserve Bank of St. Louis: S&P/Case-Shiller U.S. National Home Price Index
Federal Reserve Bank of St. Louis: Median Income since 1983
Historical data
census.gov Median Income from 1947 until 1965
DaveManuel.com: Median Income from 1967 until 1983
Online Data Robert Shiller: Historical US Home prices until 1983
Interpretation
Historically, an average house in the U.S. cost around 5 times the yearly household income. During the housing bubble of 2006 the ratio exceeded 7 - in other words, an average single family house in the United States cost more than 7 times the U.S. median annual household income.
The Case-Shiller Home Price Index seeks to measure the price level of existing single family homes in the United States. Based on the pioneering research of Robert J. Shiller and Karl E. Case the index is generally considered the leading measure of U.S. residential real estate prices. The index has a base of Jan 2000=100 and is multiplied by 1800 in order approximate the Average Sales Price of Houses Sold for the United States.
According to Mike Maloney this ratio is heavily influenced by interest rates. When interest rates go down the affordability of a house goes up, so people spend more money on a house. Interest rates have now been falling since 1981 when they peaked at 15.32% (for a 10-year US treasury bond).

Data Sources
Recent data
Federal Reserve Bank of St. Louis: S&P/Case-Shiller U.S. National Home Price Index
Federal Reserve Bank of St. Louis: Median Income since 1983
Historical data
census.gov Median Income from 1947 until 1965
DaveManuel.com: Median Income from 1967 until 1983
Online Data Robert Shiller: Historical US Home prices until 1983
https://www.longtermtrends.net/home-price-median-annual-income-ratio/