While you would think that maximizing employment would be a good thing, right now the Fed is trying to bring inflation down, which means that we all have to go through some economic pain, including higher levels of unemployment. If a large share of workers remain employed and make more money, they’ll keep spending, further fueling inflation. But one thing that people aren’t as interested in spending on is homes. Home sales dropped 1.5% in September from the month before, and remain 23.8% lower than last year. Higher mortgage rates (which currently sit at an average of 6.94% for a 30-year fixed-rate loan) are weighing on prospective buyers who are forced to pay more for a home, and more for the home loan, meaning that buyers might have to pay hundreds of thousands of dollars more to become a homeowner. The median price for a single family home rose to $391,000, 8.1% higher than September of last year. Stocks are rising this morning on the heels of stronger-than-expected earnings. Don’t be too surprised if stocks go on a rollercoaster ride throughout this earning season, as investors respond to strengths and weaknesses in corporate reports.
