The Notetaker

@Panamaalcaldia @Mayer @ATTTPanama otra aquí para ustedes. Fue hace 2 días

@Mayer @ATTTPanama

@ATTTPanama @Mayer Todo los días hay un carro o otro en la acera por Los Delfines en Marbella

Signs of Weakness The percentage of houses where the price had to be cut in order to be sold has risen recently. This percentage rose from ~2% at the beginning of the year to over 7% now. This is a very fast change and shows some cracks in the housing market.

Another way to visualize the weakening consumer is through Google Searches for late rent and mortgage payments. The search term "Late on Rent" has risen rapidly in recent months. Credit to @LarryCheungCFA for sharing this insight.

Pandemic Savings are Drying Up Personal saving rate peaked at 33.8% in April 2020 in the midst of lockdowns. Now, the rate is at 5.1%, which is below average. Many households used their savings to put in larger deposits for houses, but that excess money is no longer available.

Weak Real Wage Growth The chart below from @PensionCraft shows how inflation adjusted wages have fallen off a cliff in the last two years. With ~9% inflation, purchasing power is eroding and income simply cannot keep up with rising home prices and higher financing costs.

Homebuilders are responding to this excess supply of new homes and demand destruction from higher rates. Recent data shows that housing starts (how many new constructions have started) have plunged 9.6% MoM, reaching its lowest levels since February 2021.

The primary reason for rising and resilient home prices: Low Supply. This chart from @EPBResearch shows how many months it would take at the current pace of sales to clear housing inventory. Supply of EXISTING homes is well below historical averages. Why is this important?

The cost to take out a mortgage is very expensive. The 30-Year Fixed Mortgage Rate is at 5.22% (it was under 3% two years ago.) This rapid increase in mortgage rates combined with higher home prices has made mortgage payments soar by 37% Year over Year.