New Tractor Sales Are Declining

[2manyrocks]

I forget exactly how Powell said it at one of his press conferences last year, but it was something similar to not wanting inflation expectations to get built into the economy. Too late now, buddy.

 

[5030]

All idiots far as I'm concerned. I quit following along. Just makes me ill.

 

[finn1]

If they had reversed their course at the time they were saying inflation was "transitory," they might have had a far different outcome than waiting another year to act during which price increases had pretty well set in throughout the entire economy. At this point, it should be obvious to everyone that purchasing power has taken a substantial hit, prices are up, and retail prices are going to stay up absent another melt down similar to 2008. People aren't going to cut back on their prices voluntarily when they have to pay more for everything they have to buy to operate. This is why it's always been said prices tend to ratchet upwards during times of inflation, but tend not to come back down.

Although I see some limited easing of prices in the real estate market, asking prices are still crazy compared to 2019 levels. 30 year mortgage rate has been hovering right at 7% the past few days. The increasing cost of home repairs and insurance is where I'm seeing more and more complaints.

7% probably isn’t a bad rate if you look at history. We bought at 12% back in 1985, if I remember correctly. It didn’t stay there long, so we refinanced a couple of times, though. Even our first house a decade earlier was, I think, around 6% or so.

My memory says 5% was pretty typical for several decades.

The 2.5 -3.5% numbers were an aberration that gave everyone a false sense of reality. It also lead to an unreasonable sense of the type house everyone “deserves”

Edit. The average rate since 1971 is 7.75%.

WHY are people bitching?

 

[jyoutz]

7% probably isn’t a bad rate if you look at history. We bought at 12% back in 1985, if I remember correctly. It didn’t stay there long, so we refinanced a couple of times, though. Even our first house a decade earlier was, I think, around 6% or so.

My memory says 5% was pretty typical for several decades.

The 2.5 -3.5% numbers were an aberration that gave everyone a false sense of reality. It also lead to an unreasonable sense of the type house everyone “deserves”

Edit. The average rate since 1971 is 7.75%.

Ewhy are people bitching?

My first mortgage in 1987 was at the prevailing rate of 10%

 

[riptides]

....

Edit. The average rate since 1971 is 7.75%.

WHY are people bitching?

They thought 3 percent was the new normal for the foreseeable future.

 

[Torvy]

3% was the 50 year average. Hardly a passing trend. Accept that this is bad. It will get worse.

(Inflation rate)

 

[airbiscuit]

30 Year Fixed Mortgage Rate - Historical Chart​

 

[cathy liebchen]

Still plenty of people with money to spend so it’s going to take 2 years to cycle

 

[airbiscuit]

Especially when nice weather comes.

 

[Cahaba Valley Farm]

Not really a surprise.

Last June, 2022, in announcing a plan to hike rates through 2023, Powell said: "I'd say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again."

All of this seemed to come as a shock to some in the financial and real estate world who kept saying they wouldn't keep hiking rates, but would "pivot."

He said what they planned to do last June. Why some didn't take him at his word, I dunno, unless its just wishful thinking that an endless supply of 30 year mortgage money at 3% interest is how things were going to roll forever no matter how crazy it made the residential real estate market and drove up consumer prices on everything else.

7% probably isn’t a bad rate if you look at history. We bought at 12% back in 1985, if I remember correctly. It didn’t stay there long, so we refinanced a couple of times, though. Even our first house a decade earlier was, I think, around 6% or so.

My memory says 5% was pretty typical for several decades.

The 2.5 -3.5% numbers were an aberration that gave everyone a false sense of reality. It also lead to an unreasonable sense of the type house everyone “deserves”

Edit. The average rate since 1971 is 7.75%.

WHY are people bitching?

My first mortgage in 1987 was at the prevailing rate of 10%

In the early to mid '90s 9% was considered a good mortgage rate. As finn said, this 3% mortgage rate business has been an aberration and also bad policy in my opinion. It did nothing but create another housing bubble. Keeping interest rates that low for as long as they did threw many things out of balance in the economy. That was not good monetary policy. It cracks me up how the "experts" like Jeremy Siegel at Wharton University are confused by the fact that the economy is still humming along with higher interest rates. As if we have not had good economies in the past with higher interest rates. The news media will always find a fool to carry the narrative they want to push.