Policymakers also want to evaluate the impact of their actions on the economy so far. The Fed imposed its fastest series of rate increases since the 1980s, but it wants to avoid over-tightening and causing a significant recession.
May’s inflation data aided the Fed in making today’s decision. The Consumer Price Index in May rose just 4% year over year, before seasonal adjustment, compared to a 4.9% increase in April. Real wages also continue to fall, suggesting that the Fed has cooled, if not broken, the labor market.
“Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy,” the Fed said in its post-meeting statement. “In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
But it’s a delicate balance.
A series of bank failures — including Silicon Valley Bank, Signature Bank and First Republic Bank — have spurred concerns that banks are reducing their appetite for new loans, hurtling the economy towards a recession. Fears of a commercial real estate collapse have also emerged.
Fed Chairman Jerome Powell told reporters on Wednesday that it makes sense to moderate rate hikes as the policymakers get closer to the destination. The benefits of that, according to Powell, is that the Fed officials can access more information to make better decisions.
“The main issue that we’re focused on now is determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time,” Powell said. “So, the pace of the increases and the ultimate level of increases are separate variables. Given how far we have come, it may make sense for rates to move higher, but at a more moderate pace.”
Regarding the banking crisis, Powell said that “we don’t know the full extent of the consequences of the banking turmoil that we’ve seen.” However, with today’s decision, the Fed will “have some more time to see that unfolding.”
What’s next?
Investors are waiting for indications of what will happen next, as the macroeconomic policy crafters have yet to break the labor market and inflation levels are still double the 2% target.
The CME FedWatch Tool showed a 98% chance the Fed would hold rates at the current range on Wednesday morning, according to interest rate traders. However, 60% of these investors bet officials will impose a rate hike at the July 26 meeting.
In favor of another rate hike is the fact that employment continues to rise and consumer spending has been resilient. According to the latest labor market report, total nonfarm payroll employment rose by 339,000 jobs in May, compared to April.
The FOMC published new projections for the U.S. economy that expect the GDP to change by 1% in 2023 compared to 0.4% estimated in its March meeting. The unemployment rate is expected to be at 4.1% (compared to 4.5% in March) and the PCE inflation is projected to be at 3.2% (compared to 3.3% in March).
Policymakers also expect the federal funds rate at 5.6% at the end of 2023, which opens the door to the possibility of two rate hikes at the end of this year. March’s projection was at 5.1%.
“Looking ahead, nearly all Committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2%,” Powell said. “We have been seeing the effects of our policy tightening on demand in the most interest rate sensitive sectors of the economy, especially housing and investment. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”
Today’s Fed decision will have an impact on the housing market. Industry experts believe mortgage rates will remain high compared to last year.
Ahead of the Fed meeting, mortgage applications picked up last week as rates dropped slightly – another factor that impacted rates was the debt ceiling agreement.
On Wednesday afternoon, mortgage rates for 30-year fixed-rate mortgages were at 6.70%, according toHousingWire‘s Mortgage Rates Center. However, at Mortgage News Daily, mortgage rates were higher, at 6.98%.
“For real estate markets, today’s decision by the Fed will ensure that mortgage rates are likely to keep moving sideways for the next couple of months,” George Ratiu, chief economist at Keeping Current Matters, said in a statement. “The 30-year fixed mortgage rate has moved in the 6% – 7% range since mid-November 2022, cresting the upper limit several times over the past few weeks.”
The Fed’s pause means borrowers can see, for June, a stabilization of rates across a range of industries, particularly mortgage and credit cards, according to Michele Raneri, vice president and head of U.S. research and consulting at TransUnion.
Raneri said in the mortgage market, “It remains to be seen if, in the short term, this will spur many who have been holding off to finally engage in a new purchase or refinance, or if they will continue waiting until rates begin dropping.”
frustrated this spring with the limited inventory of existing homes, at least one segment of the housing market is seeing a silver lining: new home builders.
Builder confidence in the market for newly built single-family homes in May rose five points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This marks the fifth straight month that builder confidence has increased and is the first time that sentiment levels have reached the midpoint mark of 50 since July 2022. Scores over 50 indicate that builders view market conditions as “good” rather than “fair” or “poor.”
One reason for the limited supply of homes has been the sub-5% mortgage interest rates that 85% of current mortgage holders are locked in to, which discourages current homeowners from selling their home and buying another at today’s elevated interest rates.
Current mortgage rates 2023
Total housing inventory registered at the end of March was 980,000 units, up 1% from February and 5.4% from one year ago (930,000), but the country has just a 2.6-month supply of homes, far lesser than the five to six months needed for a balanced market, according to the National Association of Realtors.
Learn more: Best personal loans
Home prices:7 in 10 metros saw home price gains in the first quarter of 2023. See where.
Rent:Single family homes for rent are getting more expensive. Here’s where prices are going up
Mortgage rate:How will the housing market be affected with the Federal Reserve interest rate hike?
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Achieve the perfect shabby chic aesthetic with these shopping tips and tricks.
Blending vintage and French country aesthetics, shabby chic is one of the most popular interior design trends of today among trendy styles like Japandi and Coastal Grandmother. Elegant, classical furniture is given a rustic twist with distressed paints and worn fabrics.
Cottage-style items like metal jugs meet glittering chandeliers for a look that’s equal parts warm and cozy but also romantic and glamorous. Neutral, muted colors are the main colorways, with pops of color added in — usually soft pastels like pink and blue.
If you want to curate this stylish and trendy aesthetic in your apartment, here’s how you can find the right type of decor and furnishings.
How to find shabby chic furniture and decor for your apartment
Due to its heavy use of vintage (or vintage-styled) furniture, thrifting and going to antique stores are some good ways to source the right style of items for your shabby chic apartment. But that can take time to curate the right pieces.
If you want to realize your vision faster, finding shabby chic decor and furniture online at major retailers like Amazon is easy. You can also follow home and lifestyle influencers and blogs like French Country Cabin and Amy Berry for shabby chic design inspiration and ideas.
17 shabby chic decor ideas for your apartment
Not sure where to start decorating your apartment as shabby chic? These 17 decor items will look right at home in any shabby chic setting, giving you a good springboard for other decor ideas.
1. Shabby chic key holder shelf
Image Source: Amazon.com
Whether it’s for keys or coffee cups or towels, having a wall shelf with key hooks frees up cabinet storage and fills up wall space. The top shelf is ideal for holding letters, sunglasses or whatever else you need.
With its brass-finished hooks and distressed white-and-brown paint job, this key holder shelf both fits the shabby chic style and gives you a handy place for your keys, purse and other regularly used items.
2. Ruffled, farmhouse-style shower curtain
Image Source: Amazon.com
Everyone needs a shower curtain (unless you want to get water all over the bathroom and have no privacy while showering). Give yours a shabby chic twist with this farmhouse-style shower curtain with a ruffled base and cute wooden buttons.
3. Metal jug vase
Image Source: Amazon.com
Cottage and farmhouse elements are a key part of the shabby chic look, which you can incorporate with a vintage-looking metal jug vase. Its petite size, pitcher style and “Flowers & Garden” branding make it perfect as a flower vase.
Put it in the kitchen and fill it with mixing utensils, set it up on your apartment balcony or stoop with gardening tools…the possibilities are endless. Plus, the turquoise color will add a pop of color to the space.
4. Pink and ivory oriental wool rug
Image Source: Amazon.com
With their colorful patterns, most Oriental-style rugs won’t fit the traditional shabby chic color scheme. Instead, try out this ivory and soft pink wool rug, with a floral-style pattern to match the garden aesthetic part of shabby chic. This rug will look nice contrasted against gray and tan furniture, and the wool fabric will feel great underfoot.
5. Lace macrame vintage tablecloth
Image Source: Amazon.com
Delicate accessories go a long way to completing the shabby chic look. Use a lace macrame tablecloth on any kind of table, from side tables to dining tables, to add an air of glamour and elegance.
This particular one is also machine-washable, which makes it easy to clean in case of spills or messes. Just because you love an old-fashioned style doesn’t mean you want to clean and scrub laundry like they did in the olden days!
6. Decorative lantern
Image Source: Amazon.com
Old-fashioned, vintage lanterns are another in-style touch for the shabby chic aesthetic. Distressed white paint on metal adds a rustic vibe, while elegant, curled metalwork brings in fairy-tale elements. With four glass panes, you can add real or fake battery-powered candles to give your shabby chic space a warm, candlelit glow.
7. Tiffany floor lamp
Image Source: Amazon.com
With their lovely and often floral-themed glasswork, Tiffany lamps fit right in with the shabby chic school of design. But you want for one without too many colors, as strong colors stand out too much for the muted, cozy feel of a shabby chic space. This standing floor lamp fits the bill, with its arched gooseneck and burnished brass finish further fitting the shabby chic look.
8. French country-style hanging chandelier
Image Source: Amazon.com
One of the easiest ways to add that touch of glamour to your shabby chic abode is by hanging a small chandelier. Tiny chandeliers are a big part of the aesthetic, elevating the cottage-core theme of the room with its grand appearance. This French country-style example with dangling pendants and fake candles will look right at home in any shabby chic apartment. Just be sure that the chandelier you choose isn’t too big, as petite and delicate is the name of the game for this style.
9. Rustic cottage end table
Image Source: Amazon.com
It’s always good to add an end table to the sides of your couch. They’re handy for holding lamps or just as spots for decorative items. This cottage-style one features distressed paint for a rustic, farmhouse look that will look great paired with an elegant lamp.
10. Vintage floral wallpaper
Image Source: Amazon.com
With its style references grounded in the French countryside and cottage-core, florals are a motif that shows up frequently in shabby chic interior design. If you don’t want plain walls, put up a refined floral wallpaper like this one with delicate pink roses and white curlicues against a linen-patterned soft blue background.
Best of all, this adhesive paper can also work for cabinets, shelves, dressers and other flat surfaces. So if you don’t want to fill a whole wall with it, you can still incorporate it into the overall look. It’s easily removable as well, which makes it very renter-friendly.
11. Metal frame bed
Image Source: Amazon.com
A simple but attractive metal bed frame that looks like something out of a fairy tale perfectly fits the shabby chic look. This one from Amazon is sturdy, so you’ll still get a good night’s sleep while achieving the look and vibe you want.
12. Floral, vintage-style bedsheets
Image Source: Amazon.com
Going back to the floral motif, outfit your bed with floral-patterned bedsheets like this delicate rose set. The cozy and soft cotton with the rose pattern will look and feel good.
13. Vintage bird cage decor and letter holder
Image Source: Amazon.com
Use a vintage-style bird cage for practical purposes like holding letters or simply set it up as a purely decorative element. Either way, it’ll look right at home in your shabby chic apartment.
14. Vintage table clock
Image Source: Amazon.com
Constantly getting out your modern smartphone or using a contemporary wall clock to check the time isn’t very shabby chic. With distressed white paint, an antique watch face and elegant metal work, this vintage-style clock helps you tell the time without taking away from the shabby chic vibe.
15. Entryway table
Image Source: Amazon.com
It’s always handy to have a table in your entryway. It gives you a place for keys, mail, your purse or other items you regularly need when you leave the house. The curving legs, distressed white paint and rustic wooden shelf of this entryway table screams shabby chic, helping you keep your aesthetic while being practical at the same time.
16. Antique-style loveseat
Image Source: Amazon.com
With soft gray fabric, distressed wood and its tufted fabric pattern, this loveseat is petite enough to fit in any shabby chic apartment living room. Not only is the look spot-on for French country, but everyone needs a place to sit.
17. Distressed drawers
Image Source: Amazon.com
This robin-egg blue dresser with distressed paintwork will be the perfect complement to the pink and white tones of the rest of your bedroom, giving you a place to store your clothes without ruining the shabby chic aesthetic.
Turn your dream apartment into a shabby chic decor haven
With its soft, flowy feel and mix of elegant and rustic Old-World styles, shabby chic is a very fun and accessible style for any apartment. Ready to transform your apartment into a cottage in the French countryside with a shabby chic aesthetic? Find the right apartment for your vision by checking Rent.com listings in your desired area.
You don’t have to search all that hard to find the best Italy cruises — most leading cruise lines offer dozens of itineraries that visit Italian ports, often in conjunction with neighboring countries France, Greece and Croatia.
The reason? Italy has it all: coastlines on both the Mediterranean and the Adriatic, historic port cities (Rome, Venice and Naples among them) and spectacular islands (including Sicily, Sardinia, Capri and Elba).
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Plus, with a cruise season that runs from early April through late October (and even year-round for a few cruise lines), Italy offers something for everyone. Travel here to find an alluring mix of impeccably preserved historic sites, renowned regional cuisines and natural wonders waiting to be discovered.
Here are eight of the best Italy cruises for every type of traveler.
Best Italy cruises for cultural immersion: Azamara
Azamara pioneered the concept of single-country itineraries, which allow for greater cultural immersion and even overnight stays in select ports. The cruise line’s 11-night voyage in October 2024 is one of its most comprehensive.
The sailing begins in Monte Carlo, Monaco, and ends in Rome (Civitavecchia), with visits to seven more Italian ports and Tunis, Tunisia. You’ll explore Genoa, Livorno (overnight for Florence/Pisa), Porto Santo Stefano (on the Tuscan coast), Cagliari (on Sardinia), Trapani (on Sicily), Amalfi and Sorrento.
This voyage is aboard the 684-passenger Azamara Onward, one of the cruise line’s four virtually identical ships. (All are former Renaissance R-class ships built in the early 2000s and renovated over the past several years.) The vessels’ intimate size and Azamara’s focus on cultural experiences and shore excursions emphasizing history and food (including cooking classes and market tours) make for an immersive cruise itinerary.
Other Italy-Intensive voyages in 2023 and 2024 include the following: a 10-night voyage in October 2023 aboard Azamara Quest, a 10-night voyage in April 2024 aboard Azamara Pursuit, and a seven-night voyage in May 2024 aboard Azamara Quest.
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Best Italy cruises for small-ship lovers: Windstar Cruises
It’s rare to find a cruise itinerary so fully focused on one specific region of Italy, but Windstar Cruises’ small ships — three classic sailing yachts and three all-suite motor yachts, which accommodate 148 to 342 guests — allow it to offer cruises to less-frequented ports.
Windstar’s 10-day Sicilian Splendors, aboard its 342-passenger sailing yacht Wind Surf, is available on multiple dates in 2023, 2024 and 2025. The ship will cruise round-trip from Rome and call on six Italian ports: Catania (for Mount Etna), Porto Empedocle (for the ancient ruins at Agrigento) and Trapani (for its signature colored salts and Marsala wines), all in Sicily; the island of Lipari (the largest of seven Aeolian Islands); and Sorrento and Amalfi on the stunning Amalfi Coast. The cruise also visits the neighboring islands of Malta and Gozo.
Five-masted Wind Surf is the world’s largest sailing ship. It manages to be intimate without feeling claustrophobic, although it is worth noting that none of its staterooms or suites has a balcony. There is, however, ample deck space for relaxation, with a pool and two hot tubs, as well as inviting alfresco bars and dining areas.
Related: The 2 classes of Windstar ships, explained
Indoors, the ship’s restaurants and social spaces, such as the Veranda Restaurant, Stella Bistro and the Compass Rose Bar, are light-filled, with elegant neutral decor refreshed in 2019.
Musical entertainment takes place in the Wind Surf Lounge and Compass Rose Bar, and Windstar’s excellent dining program reflects an ongoing partnership with the James Beard Foundation. In select tender ports, passengers can enjoy a watersports platform and take out sea kayaks and stand-up paddleboards.
Best Italy cruises for onboard pampering: Ritz-Carlton Yacht Collection
If enjoying yacht-style indulgence as you explore Southern Italy is on your cruise wish list, consider the Ritz-Carlton Yacht Collection’s 10-night Rome to Valletta itinerary in May 2024. This cruise visits scenic hot spots such as Sorrento and Amalfi on the Amalfi Coast, history-rich Siracusa in Sicily and three ports (Gallipoli, Taranto and Otranto) in lesser-known Puglia, located on the heel of boot-shaped Italy, before passengers disembark in Malta.
Ritz-Carlton, which entered the cruise realm in 2021 with its 298-passenger luxury yacht, Evrima, offers an all-inclusive “yachting lifestyle” experience. This leisurely sailing features overnights in Sorrento and Taranto and two sea days with ample ways to enjoy onboard pampering. The ship’s spacious suites are designed with a contemporary residential feel and range in size from 300 square feet with an 81-square-foot terrace to 1,091 square feet with a 635-square-foot terrace.
Evrima also offers nine bars and dining venues featuring menus created to reflect the ports visited. For culinary indulgence, guests can book a table at S.E.A., a specialty dining experience designed by Chef Sven Elverfeld of Aqua, the Michelin three-starred restaurant at The Ritz-Carlton in Wolfsburg, Germany.
The ship also features chicly designed spaces for relaxing and socializing, such as the Pool House lounge overlooking an aft infinity pool, a second pool located next to the alfresco restaurant Mistral, a panoramic Observation Lounge and a full-service Ritz-Carlton Spa.
Related: The best luxury cruise lines for elegance and exclusivity
Best Italy cruises for foodies: Silversea Cruises
The three newest ships in the Silversea Cruises fleet — Silver Moon, Silver Dawn and 2023’s first-in-class Silver Nova — all feature the cruise line’s immersive culinary program known as S.A.L.T. (Sea and Land Taste). When Silversea’s next ship, the 728-passenger Silver Ray, debuts in 2024, it will also take its guests on culinary-focused journeys — among them an 11-day Rome to Venice itinerary in June 2024.
The itinerary includes calls on seven ports in Italy: Rome, Naples, Sorrento, Palermo, Siracusa, Trieste and Venice. The sailing also visits ports in Malta, Montenegro and Croatia.
Silversea’s sailings blend food-centric excursions — such as a visit to a family farm for a tasting of fresh cheese, salami and olive oil in Sorrento — with the onboard S.A.L.T. program to make sampling local cuisine a natural part of the cruise experience. The day-to-day menus at S.A.L.T. Kitchen are all inspired by the ports visited. The Terrain menu focuses on that day’s port while the Voyage menu draws from the best flavors of the entire itinerary.
Passengers aboard Silver Ray should definitely pack an appetite — in addition to S.A.L.T. Kitchen, the ship features seven other restaurants. They are La Dame for haute French cuisine, Atlantide for signature fine dining (think caviar and lobster), Kaiseki for Japanese sushi and teppanyaki (as well as pan-Asian dishes), Silver Note for tapas-style dining and live music, The Grill for casual burgers and salads, La Terrazza for handmade pasta and other Italian specialties, and Spaccanapoli for thin-crusted Naples-style pizza. With 11 nights aboard, there’s time to sample all of them.
Related: The ultimate guide to cruise ship food and dining
Best Italy cruises for families: Norwegian Cruise Line
If an Italy adventure with the entire family sounds like the perfect cruise vacation in 2024, Norwegian Cruise Line’s new Norwegian Viva, launching in August 2023 as the sister ship to 2022’s Norwegian Prima, is an ideal playground for guests of all ages.
The most Italy-focused itinerary? The 10-day Mediterranean: Italy, Greece & Croatia cruise (offered aboard 3,099-guest Viva in late June and late September 2024) calls on six ports in Italy — Rome, Livorno, Naples, Messina, Siracusa and Trieste — as well as the islands of Corfu and Malta; Koper, Slovenia; and Dubrovnik and Split in Croatia.
This itinerary is rich in history and culture, including the ancient landmarks of Rome, the archeological wonders of Pompeii and the Leaning Tower of Pisa near Livorno, plus the beauty and culinary treats (sweet cannoli and savory arancini) of Sicily, where Viva makes two port calls. Though the cruise ends in Trieste, the wonders of Venice are just 90 minutes away, so adding a few extra nights to explore its colorful, canal-laced islands is a must.
Onboard Viva, you’ll enjoy more than a dozen dining options (five of them complimentary, including the casual and family-friendly Indulge Food Hall), 16 bars and lounges and all the fun activities/entertainment (including a production of the Broadway hit “Beetlejuice: The Musical”) that the line offers.
Related: Best cruise lines for families
Top amenities include the three-deck Viva Speedway for exhilarating go-kart racing, three thrilling slides (two of them 10-story corkscrew dry slides and one tidal-wave-style waterslide), virtual-reality gaming in the Galaxy Pavilion, tech-enhanced minigolf and more. Also, Viva’s generous outside deck space — especially Deck 8’s Ocean Boulevard with its lively Indulge Outdoor Lounge and sleek Infinity Beach pools — is ideal for scenic cruising in the Mediterranean and Adriatic.
Best Italy cruises for couples: Oceania Cruises
The sophisticated onboard ambiance and a romantic itinerary are a lovely combination, and couples can enjoy both on the 12-night Mediterranean Tapestry sailing offered in June 2024 aboard Oceania Cruises’ newest vessel, Oceania Vista.
The 1,200-passenger ship, which debuted in May 2023, will visit four top ports in Italy — Venice/Trieste in Northern Italy, Taormina in Sicily, Amalfi/Positano in Southern Italy and Civitavecchia for a day in Rome.
Beyond Italy, this itinerary offers a sampling of scenic locales in six other Adriatic and Mediterranean countries with a possible pre-cruise stay in Venice. You’ll visit Korcula and Split in Croatia; Kotor, Montenegro; Igoumanitsa and Katakolon in Greece; Ajaccio, Corsica; Monte Carlo, Monaco; Marseille, France; and Barcelona, Spain.
Oceania caters to couples seeking an upscale cruise experience with a culinary focus. Onboard Vista, the atmosphere is sleek and polished, with interior decor awash in elegant neutrals of varying patterns and textures, all woven together into a soothing mosaic (in some cases, literally, as tiled vignettes are used throughout the ship). Vista’s bars and lounges, especially the Martini Bar and the Grand Lounge, are so chic you’ll want to get dressed up every night to enjoy one of the craft cocktails on their newly enhanced menus.
All specialty dining is included in the cruise fare, and stand-out meals at Polo Grill (for an excellent steakhouse menu), Toscana (for authentic Italian, including recipes by Vista’s godmother Giada De Laurentiis) and Red Ginger (for flavorful pan-Asian) are just a reservation away. Two new eateries, Aquamar Kitchen and Ember, serve wellness-focused cuisine and casual American comfort food, respectively, and an expanded Culinary Arts Center lets guests who love to cook take hands-on classes.
Best of all, Vista is an all-balcony ship, so every stateroom features access to fresh air (French Veranda Staterooms don’t have an outdoor sitting area, however). Veranda Staterooms and Concierge Level Veranda Staterooms offer a spacious 290 square feet of indoor space — and some of the best standard bathrooms at sea with roomy walk-in showers and ample storage.
Related: The best cruises for couples seeking romance and together time at sea
Best Italy cruises for travelers on a budget: Royal Caribbean
To score a budget cruise fare in the Mediterranean, it helps to look for sailings aboard a cruise line’s older ships. If Italy is your main focus for a future cruise, it’s hard to beat the seven-night Western Mediterranean itinerary in September 2024 aboard Royal Caribbean’s Voyager of the Seas.
It visits five Italian ports: Venice/Ravenna, Messina in Sicily, Naples, Rome and Livorno (for Florence and Pisa). The ship also calls on Marseille and Barcelona. Voyager’s Italy-focused cruise is a jam-packed itinerary with just one sea day.
Ideal for both couples and multi-generational families, the 3,600-passenger Voyager of the Seas (which debuted in 1999 and was last refurbished in 2019) features seven restaurants (including three complimentary dining venues and specialty restaurant favorites Chops Grille and Giovanni’s Table) and eight bars/lounges.
The ship has been “amped-up” so guests can enjoy features found on Royal Caribbean’s newer ships: Perfect Storm waterslides, FlowRider simulated surfing, Battle for Planet Z laser tag, Voyager Dunes minigolf, Studio B ice-skating shows and reimagined spaces for kids and teens.
Nights aboard Voyager of the Seas will be filled with complimentary entertainment options: production shows in the Royal Theater, pub performances by guest entertainers and bands, game-show competitions, pool parties, outdoor movie nights and a ‘70s disco party.
Best Italy cruises for adults-only ambiance: Viking
Is Venice at the top of your wish list? Does an adults-only cruise on a ship with serene, Scandinavian-inspired interior decor and complimentary wine or beer with lunch and dinner sound ideal?
If so, check out Viking’s 15-night Italy, the Adriatic and Greece itinerary, which sails from Athens to Rome and visits six Italian ports — Venice/Chioggia, Bari, Crotone, Messina, Naples and Rome — with three days spent in Venice. As a bonus, you’ll also visit ports in Greece (Katakolon and Corfu), Croatia (Dubrovnik, Split and Sibenik) and Montenegro (Kotor).
Offered on multiple dates in fall 2023, 2024 and 2025, this itinerary is chock full of port experiences; there are no sea days, and a total of 13 cities are visited. Viking includes one free guided shore excursion in each port, usually a panoramic bus tour or historic walking tour. Use that as an overview and then explore on your own or book one of the cruise line’s longer or more specialized excursions. Onboard guest speakers also offer insight into the ports visited and the cultural landscape.
The cruise line’s nine ocean ships are all identical and accommodate 930 passengers, most of whom are couples over age 55. Onboard dining is available in eight restaurants, including the main venue, The Restaurant and the buffet-style World Cafe, the casual Pool Grill and the Norwegian-focused Mamsen’s. Guests can also reserve dinner at two specialty restaurants (at no extra charge): Manfredi’s for Italian cuisine and The Chef’s Table for multi-course, wine-paired menus that rotate throughout the cruise.
Afternoon tea is served in the elegant Wintergarden. The Aquavit Terrace overlooking the aft infinity pool is a sunny spot to enjoy alfresco dining.
If you’re willing to come back early from port, Viking’s ocean ships offer plenty of ways to relax on board. All passengers enjoy complimentary access to the ship’s thermal suite in the LivNordic Spa. It features a thalassotherapy pool, steam room, sauna and snow room. The Main Pool has a retractable roof and can be enjoyed no matter what the weather. However, if you want to live it up at night, note that the ship does not have an onboard casino.
Bottom line
The best Italy cruises offer access to some of the country’s most-loved cities, as well as a chance to explore some of its sunny islands and lesser-known coastal ports. No matter the itinerary, you’re guaranteed to enjoy the splendid landscapes, treasured antiquities and, of course, the incredible gelato.
All I am doing is staying consistent with what I have talked about for years now; rates matter, but it’s more of a rate of change for housing, which was the same thing that happened in the previous expansion. Except now, we have had massive price gains in 2020, 2021 and 2022. The market is savagely unhealthy and needs balance; this is what we call balance!
I know some people don’t agree with me on this, but the price gains in both the existing home and new home sales sector show that homebuilders and sellers had too much pricing power and needed to be checked. The only way this happens is by higher rates.
From Census: Sales of new single‐family houses in April 2022 were at a seasonally adjusted annual rate of 591,000, according to estimates released today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.6 percent (±10.4 percent) below the revised March rate of 709,000 and is 26.9 percent (±13.7 percent) below the 2021 estimate of 809,000.
As we can see below, the new home sales report just took us back almost to the 2018 levels — the last time when rates rose toward 5% and created a supply shock. As you can see, sales levels were never elevated like what we saw from 2002-2005. This housing cycle is and will always be based on real demand, versus the credit boom we saw from 2002 to 2005.
Slow and steady wins the race. These big headline prints tend to get revised to a more proper level. However, the housing market changed once the 10-year yield broke over 1.94%.
From Census: Sales Price The median sales price of new houses sold in April 2022 was $450,600. The average sales price was $570,300.
Keeping with the theme that the years 2020-2024 would be different, we can see the builders had pricing power, and they pushed it onto the consumer. Things will be different now, but balance is a good thing in the long run.
I understand why people will fight me on my position that higher rates are needed, but you have to remember that I created a specific price-growth model for housing just for 2020-2024, knowing that we could break out in an unhealthy way. As long as home prices only grew to 23% in those five years, we would be OK to have 6.2 million total home sales each year from 2020 to 2024. That didn’t happen, so rules are rules, and models are written for a reason. The chart below is worth a thousand words.
From Census: The seasonally‐adjusted estimate of new houses for sale at the end of April was 444,000. This represents a supply of 9.0 months at the current sales rate.
My rule of thumb for anticipating builder behavior is based on the three-month average of supply:
When supply is 4.3 months and below, this is an excellent market for the builders. They will happily build.
When supply is 4.4 to 6.4 months, this is just an OK market for the builders. They will build as long as new home sales are growing.
When supply is 6.5 months and above, the builders will pull back on construction.
The monthly supply has spiked, the 3-month average is at 7.4 months, and the headline number is at 9.0 months!
Before I go on, I need to remind readers that the new home sales market is different from the existing home sales marketplace. Even today people think this monthly supply spike is for the current home sales market. This isn’t the case; the monthly supply for existing homes is only 2.2 months.
My biggest thing is getting total inventory back to 2018-2019 levels, which can range from 1.52-1.93 million, and I can stop labeling this housing market a savagely unhealthy housing market. However, this isn’t going to help much because the existing home sales market has a different inventory channel.
Now inventory is rising in the existing home sales market, and we just had some positive weekly year-over-year prints. Still, the existing home sales market has an active seller who decides to sell their home to buy another one or rent. Unless you’re an investor, that is the traditional supply decision-making, which has made it hard for inventory to grow outside of extreme housing weakness or forced selling to get inventory above six months. The only time this has happened was the 2006-2011 period.
The new home sales sector is much different — it’s a contract to purchase a home that isn’t built yet. What do we have now? A massive backlog of homes that weren’t finished and even some that haven’t started yet! Yes, the builders have issues as rates have risen on them and this will impact the single-family construction aspect of their business. However, this is much different than what we saw from 2002-to 2005.
It’s not shocking that the housing market turned once the 10-year yield broke above 1.94%. However, this marketplace, both for the new home sales sector and the existing home sales market, is much different from the run-up in demand we saw from 2002-to 2005. We have proper models and data to look at for housing that track where the sector is going, which doesn’t rely on home prices crashing down back to 2012 levels.
As long as rates stay higher, the market will create the balance it needs. The next economic take will be when the recession red flag No. 5 will be raised because housing starts tend to fall into a recession. The only reason I am not raising the flag today is that this is the new home sales report not the next housing starts report. The economic cycle is getting more and more interesting and we will go through it always one data line at a time.
Mortgage credit availability dropped in May, a consequence of a tougher mortgage landscape that has resulted in lender consolidation as well as high rates and limited inventory that has stretched consumer budgets.
The monthly Mortgage Credit Availability Index fell by 3.1% to 96.5 last month, according to the Mortgage Bankers Association. A decline of the index, benchmarked to 100 in March 2012, indicates that lending standards are tightening while an increase suggests loosening credit.
“Mortgage credit availability decreased for the third consecutive month, as the industry continued to see more consolidation and reduced capacity as a result of the tougher market,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “With this decline in availability, the MCAI is now at its lowest level since January 2013.”
While the Conventional MCAI, which does not include loans backed by the government, decreased 2.3%, the Government MCAI, which examines FHA, VA, and USDA loan programs, fell by 3.8%.
Of the two component indices of the conventional index, the Jumbo MCAI fell by 1.5% and the Conforming MCAI dropped by 3.9%.
The jumbo index had its first contraction in three months, as some depositories assess the impact of recent deposit outflows and reduce their appetite for jumbo loans, Kan said.
Wells Fargo, a formerly important jumbo mortgage lender, is reducing its home lending footprint, and JPMorgan Chase’s acquisition of First Republic Bank will result in the discontinuation of its popular jumbo mortgage program.
The drop in mortgage credit availability follows a spike in mortgage rates during the month of May, which rose to 6.43%, according to Freddie Mac.
Single-family home prices also rose to about $450,000 in May, according to data from Altos Research, up from around $443,000 in April.
Elvira Rincon never loved the small apartment that sits between Sunset Boulevard and Dodger Stadium. Even 30 years ago, shortly after she arrived from a small town in Queretaro, Mexico, and moved in with her husband and five children, the one-bedroom unit built in the 1920s felt cramped.
But over the decades she made it a home, planting a sprawling container garden of flowers, fruits and medicinal herbs to cure her family of stomach pains and colds. Her husband poured concrete to make a small patio in the courtyard, where they hosted birthday parties nearly every month. At $495 a month the rent-controlled apartment allowed Rincon, her children and now grandchildren to build a life in the heart of Los Angeles.
That made it easy for Rincon, 59, to dismiss the first buyout offer. A developer who bought the complex and a neighboring one last year proposed paying her and her neighbors $22,000 to leave. She did the math and figured the money would be gone in about one year in a county where the median rent for a one-bedroom is $1,600.
The second offer to Rincon and her neighbors came in February: $55,000. It was more money than she and her husband, who works in a local nursery, could ever save on their own — and still not enough to stay in her neighborhood for long.
Soon after, the ownerssent workersto tear apart a storage shed she’d had for years and haul it away, along with a barbecue and many of her plants, saying they were health and safety violations. Rincon saw it as harassment meant to pressure her to go so the landlord could jack up the rent.
Like so many others, she and her family had one shaky foothold keeping them in a rental market that was otherwise soaring out of reach, and they felt that people with more power than them were trying to shake them off of it.
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The company says it was simply making changes requested by its insurance company and that it is listening to the concerns of residents, not trying to force them out.
Even so, Rincon and her neighbors are on edge, unsure what to expect next and asking themselves whether they still have a place in L.A.
“There are times when I feel desperate,” she said. “I get frustrated. And I tell my husband, ‘Let’s just go. Let’s just go.’ ”
In a city faced with a housing and homelessness crisis, where many renters pay more than half their income to live in overcrowded, aging homes, tenants like Rincon have what many others long for: low-cost housing.
Though city and state officials are desperate to create more of it, developers are simultaneously reducing affordable units by buying out longtime rent-controlled tenants with cash-for-keys offers and renovating old buildings into pricey new apartments or condos. Many residents quietly accept the offers and leave. Others try to hold out, knowing that taking the money probably means leaving their communities or facing rent that’s double, triple or more what they currently pay. Sometimes, tenants say, that leads to harassment or pressure campaigns.
The city has adopted policies meant to protect tenants of rent-controlled buildings from being forced to accept buyout offers or being evicted for not accepting.
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In some cases, landlords are required to offer to tenants a base amount for relocation — which ranges from about $12,000 to $23,000 for long-term renters. At times, owners offer more than that. But for tenants with very little income or credit, the money may not go very far once the sky-high rent of their next apartment is factored in.
City leaders have passed rules against harassment. But advocates say the rules lack enforcement, and plenty of tenants say harassment happens anywaywith little recourse.
Rincon arrived in Echo Park in the mid-1990s, fleeing a severe recession in Mexico that left her family’s farm deeply in debt.
Her first home in the U.S. was in the same apartment complex where she lives now, just across the common area, in a unit she shared with her brother-in-law, Pedro Villegas, her husband and others. Three decades later, Villegas still lives in that apartment, paying monthly rent similar to Rincon’s, whose monthly payments have increased twice over the years to $640.
Despite language barriers, Rincon became close with her neighbors, who include an 80-year-old retiree, a nursing student, her mom and brother, and a Cambodian refugee.Their kids often served as translators.
They’ve watched out for each other’s children and grandchildren, fed each other’s pets and shared lemongrass and guavas from their gardens. Though Rincon doesn’t care for the loquat tree that grows in a corner of the property, she keeps watering it because her neighbors love the fruit.
“We’re more like a community. We have been for years,” said Virginia Watson, 80. “We all know each other. We talk. We watch out for each other. It’s very unusual for L.A. because in other places I’ve lived everybody’s kind of anonymous, in their own little cubicle.”
Once Watson retired and began living on a fixed income, she was able to stay in her home because the rent was manageable. The same was true for Rincon and her family when she injured her back and stopped working.
Villegas’ four children have lived their entire lives in the complex, roaming the hills of Elysian Park and riding their bikes to Echo Park. He works at a laundromat on Sunset Boulevard, a short walk away. His youngest is now a junior at Ramon C. Cortines school downtown.
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Like Rincon, heknew the $55,000 offer wouldn’t last long in his community.
“The cost of rent is just too difficult,” he said. “The money doesn’t go far.”
Watson lives in a studio apartment adjacent to Rincon’s. She’s been there for 20 years, lives on Social Security and a small retirement income and pays $529 a month. When she’s looked online for other studios in the neighborhood, the most affordable cost isnearly $1,500 a month, an amount that she said would take about three-quarters of her income.
She might have considered the offer to leave if it was affordable to move in the city, she said.
But “rent is really, really high in L.A. I don’t know how you would manage for any length of time,” she said.
On Nov. 8, a few months afterWatson, Rincon and their neighbors decided not to take the initial $22,000 offer to leave, the property owners, Lilac Development LLC, served Watson with a three-day notice to pay or leave, saying she had not paid her rent for the month, though she says it was paid.
Watson reported the incident to the housing department, which investigated and found the notice in violation of city code for failing to provide proper information under COVID-era tenant protections, according to public records.
One month earlier, the owners served another resident with a three-day notice to pay or vacate the property, saying they owed $86.
In that case, the housing department found a “potential violation of the Tenant Anti-Harassment Ordinance,” records show.
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In both cases, housing officials wrote letters to the owners, explaining the law.
Watson and her neighbors see this and other actions, including the workers who went to the complex twice in March, tore down Rincon’s shed and hauled away her plants, as a pattern of harassment meant to pushthem out of their homes.
“I wake up after dreaming that I’m in a battle with landlords, big companies,” Watson said.
Recently, she packed up many of her belongings, assuming she would soon be out of a home, and she has kept them that way.
“I don’t unpack them because I don’t know how long I’m gonna be able to be here,” Watson said.
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Rory Anglin and his girlfriend, Jenna Loredo, are the newest residents of the two complexes, having moved in four years ago. They pay $1,236 a month for their one-bedroom, which Anglin sees as “the last of the good rents in L.A.”
When he told his mom in Mississippi about the $22,000 offer to leave, she was stunned at the amount.
“In Mississippi, that does sound like a lot,” Anglin said. In L.A. it most certainly does not.
Even so, Anglin said they were willing to consider taking a buyout until they felt a harassment campaign against his neighbors had begun.
“The end game for me is ‘leave us alone,’ ” Anglin said. “If we decide we want to move, we’ll move. But before we do, I gotta make sure all this stuff stops. It has to stop.”
If there’s a silver lining, Anglin said, it’s that the neighbors have become even closer in the last few months, forming a tenants’ association and strategizing together to push back against any harassment.
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Sara Rose, a property manager for Lilac Development LLC, told The Times that although the company initially offered cash for keys in order to “try to get tenants paying market value,” the company was no longer pursuing that strategy and would focus on “making the property habitable for current tenants.”
The company is not trying to evict anyone, Rose said.
“It’s not something we would take further action on if it wasn’t appropriate to do so,” she said.
Rose also said Lilac Development sent workers to haul away Rincon’s shed, barbecue and plants after its insurance company “advised there was certain work that needed to be done” to get the property insured.
They plan to inspect each property to figure out what needs to be fixed. In April, a city housing inspector found several conditions affecting the “health and safety of the occupants” in Rincon’s building and issued an order to fix the problems, which include damaged plumbing, fences and paint, by May 11.
Residents say there is a long list of problems beyond what that inspection revealed: leaking ceilings, mold, broken heaters and damagedflooring.
“I think based on the feedback we’ve received so far there’s no interest from the residents” in cash for keys, Rose said. “If they are interested and they approach us, it would be something we’d be willing to discuss. We don’t want to continue reaching out on something they’ve made clear they’re not interested in.”
Rincon said the first she heard about the change in plans was from The Times.
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For a long time now, she and her neighbors have felt as if they were in a state of limbo, waiting for an eviction notice or the return of workers tasked with hauling away more of their things. Like Villegas, she has seriously considered returning to Mexico, but her husband tells her they could never leave their children and grandchildren.
There was some relief hearing that the company would focus on making their home more livable rather than on getting them to leave. But she was also skeptical.
If you’re looking for the most affordable way to go to Disney World, Disneyland or on a Disney Cruise, you may have wondered if Disney’s credit card offerings, the Disney Visa Card and the Disney Premier Visa Card, are good options.
Both earn Disney Rewards Dollars that you can use to pay for most things Disney, including trips to the parks or a cruise. And, after all, anything that makes a Disney trip more affordable can be a very good thing to consider.
But the answer to whether or not the cards are worth it is a little more complicated than a simple yes or no. We’ll break down how the cards work and when they are — and aren’t — worth getting in anticipation of an upcoming Disney vacation.
Disney Visa card welcome offers
The Disney Visa is the entry-level product that has no annual fee and currently awards a $150 bonus after you spend $500 on purchases in the first three months. The Disney Visa Premier has a $49 annual fee, but currently awards a $300 statement credit after $1,000 in spending in the first three months. Both are issued by Chase and thus are subject to Chase 5/24 rules.
I’m not one to turn down $150 to $300 in statement credits, but remember that several credit cards have sign-up bonuses worth $1,000 or more.
Just as an example of what else is out there, the Capital One Venture Rewards Credit Card is currently offering 75,000 bonus miles after you spend $4,000 total on purchases within the first three months from account opening, and the Chase Sapphire Preferred Card has a bonus of 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
So while $300 toward a Disney vacation sounds great (and it can be) — it’s good to compare to the value of other cards.
Related: How much does it cost to go to Disney World?
Disney Visa card rewards
Now that we’ve discussed the bonuses, when you look at everyday spending, the Disney credit cards earn rewards at different rates.
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The no-annual-fee Disney Visa earns a simple 1% back on all card purchases in the form of Disney Rewards Dollars you can use at Disney. The Disney Visa Premier, meanwhile, earns 5% back on card purchases made directly at DisneyPlus.com, Hulu.com or ESPNPlus.com, 2% back on purchases at gas stations, grocery stores, restaurants and most Disney locations, and 1% back everywhere else.
Disney Rewards Dollars are extremely limited — they’re only good for use at Disney locations With the Premier, you can also redeem your dollars for a statement credit toward airline travel, but it’s likely that there are still better options out there for you. Earning up to 5% back in Disney Rewards Dollars in some spending categories isn’t bad, but just for perspective, there are many credit cards out there that provide a better return for everyday spending than either of the Disney cards.
For example, the Capital One Venture earns 2 miles per dollar spent on all purchases, albeit for a higher annual fee of $95 per year. Some credit cards award up to 4 or 5 points per dollar at places such as grocery stores and on gas purchases, travel purchases, etc.
In other words, you can do much better than earning Disney Reward Dollars with your everyday purchases via a wide variety of credit cards.
Related: Earn more than 1 point per dollar with these cards
Disney Visa card perks
The unique perks are where the Disney Visa products get more interesting for those looking to vacation with Mickey Mouse.
First, you can save 10% on some Disney merchandise purchases of $50 or more and save 10% on select dining locations on eligible dates at Disneyland and Disney World. Some eligible spots include: Skipper Canteen at the Magic Kingdom, Rose & Crown Dining Room (lunch only) at Epcot, Kona Cafe at the Polynesian Village Resort, the Hollywood Brown Derby at Hollywood Studios and Storytellers Cafe at the Grand Californian at Disneyland (I highly recommend the breakfast with characters at Storytellers).
Related: Best restaurants at Disney World
You can also get a 10% discount on some activities, such as the horseback rides at Fort Wilderness. Finally, Disney card members also get some exclusive photo opportunities.
Related: Is Disney Cruise concierge level worth it?
Why the Disney debit card may be better
At TPG, we aren’t huge fans of using debit cards for everyday purchases, as you typically don’t earn rewards or have the same level of built-in protections as with credit cards. That said, the Disney debit card may make sense if you’re mainly interested in the Disney perks that come by having the card.
Having the debit card won’t count against Chase 5/24 status and carries no annual fee. However, you will need a Chase checking account to access this debit card option.
The Disney debit card doesn’t earn rewards (so there is no need to really use it much), but it gets you access to many of the same photo ops and discounts on Disney merchandise, dining, cruise expenses, park tours, etc., as the Disney Visa credit cards. This is a way to get the perks but avoid fees or using a 5/24 slot on a Disney credit card.
Related: Why you shouldn’t use debit cards
Why the Disney Visa cards aren’t always the best choice
I’m a bit of a Disney fanatic, so I get the appeal of having one of these Disney cards — they’re cute, too, with the different available Disney design options. If the built-in perks — the in-park character photo ops and available discounts — sound intriguing, then a Disney Visa might be right for you since those are perks not really replicated on other cards.
If you are big on Disney dining and some out-of-park experiences, saving 10% or so on those charges can add up for frequent Disney visitors.
However, if your main goal is to get a rewards-earning credit card that will rack up points or rewards you can use toward a Disney vacation, you can probably do better both in terms of a larger welcome bonus and better everyday earning rates that you can use at Disney than a Disney Visa.
Here are my favorite credit cards for families who want to use perks to travel.
Related: How to use points for Disney tickets
If you spend a lot of money at Disney and want to earn as many points or as much cash back as possible on these expenses, the Disney Visa Premier is a good choice but not always.
Bottom line
The Disney Visa credit cards are fun rewards choices for fans of all things Disney. However, the cards are far from slam dunks for Disney enthusiasts looking to earn or use rewards for a Disney vacation in all situations.
In terms of rewards, the Disney cards are better than paying for things with checks or debit cards, but they often aren’t the absolute best credit cards on the market if your goal is to use points for your next Disney trip.
Instead, have read our guide to the best credit cards for Disney vacations to save the most money and earn maximum points on your ticket, flight and hotel expenses on your next Disney vacation.
Read more: Disney Premier Visa and Disney Visa card reviews
Yes, crazy to think, but this is a survey trend data line, and the housing market was in free-fall at that time. That’s not the case now because we have’t had a credit boom post-2010 as we did from 2002 to 2005. If you connect the lines, you can see where we are on a historical basis.
What is going on here? How can housing inventory be so low today when it skyrocketed back in 2009? Let’s take a look here together because I have been worried about unhealthy home price growth since the breakout in housing demand in 2020, but it’s not because of record-breaking credit demand. It’s more of a lack of supply.
If you follow the trend of housing supply since 2014, it’s been falling every year — with a pause in 2018-2019 — and then collapsed lower post-2020. Now don’t get me wrong: demand is better in 2020 and 2021 than in any single year from 2008 to 2019. We had roughly 300,000 more existing home sales in 2020 than in 2019 and 800,000 more in 2021. I would average those two out because I believe we got some demand push through from the second-half surge in demand in 2020 into 2021.
So, on average, just 500,000 more homes were bought than in 2019. If I take existing home sales from 2017 levels, it’s roughly, on average, just 300,000. Currently, home sales are falling like when rates rise.
As you can see below, the inventory keeps falling from 2014 levels, and even with the weakness in demand this year, we are nowhere close to 2013 levels, let alone 2018 levels.
I don’t believe housing inventory below 1.52 million is a natural state for the U.S. housing market. This is a red danger zone area for forced bidding action, which destroyed my affordability models in just 2.5 years since the start of 2020. In reality, my worst fear for housing came true, and it got even worse in the early part of 2022 as we had record low inventory creating more forced bidding. You can understand why I upgraded the housing market from unhealthy to savagely unhealthy
Of course, being “team higher rates” since February of 2021 isn’t the most popular talking point, but in 2022 I increased my call for higher rates to create some balance — otherwise or pricing can get even worse. We are seeing higher rates do their thing. Today pending home sales came in at another decline.
Inventory data for the first time is showing growth, which is a good thing, folks; we don’t want to stay at these low levels and see more and more unhealthy home-price growth.
But we should ask: Why is inventory so much lower now if purchase application data is at 2009 levels — a period in time when inventory was rising noticeably in 2006, 2007, 2008 and 2009?
The first answer is that people are staying in their homes longer post-2008. Housing tenure ran at five to seven years from 1985-2007 and now is 11-13 years from 2008 2022. The Baby Boomers are not selling their homes en masse, and we have more investors providing shelter for renters than before.
However, the spike in inventory that we saw from 2006 to 2011 can be attributed to the massive credit bubble we had from 2002 to 2005. You don’t want to overcomplicate this topic. Credit stress was evident from 2005 to 2008. People were filing for foreclosures and bankruptcy for years, and then, after all that, the job loss recession happened in 2008.
With a credit boom and credit bust, the monthly supply for homes in America got over six months for years. It took many years to clear up the credit deleveraging process that needed to occur in the U.S. housing market due to rapid credit expansion with exotic loan debt products.
The housing market post-1996 has had a hard time creating more than six months’ supply unless you have extreme housing weakness and forced credit selling. These two factors were happening from 2006 to 2011 and added supply to the market. Demand has been stable enough to keep supply low, and we have no forced credit selling since the great financial crisis. This has been an issue in getting the market balanced for some years now.
What about the builders? We have more housing starts under construction now than in recent history! This is true except for one big reality!
The monthly spike in the new home sales sector looks like massive inventory should be here. Well, six months of that supply are homes that haven’t even been started, and only three months of supply are completed. We have a lot of multifamily construction going on that won’t help the homebuyer.
On top of everything else that we need to deal with on housing, housing completion data has looked terrible for years. People forget when rates rose to 5% in 2018, it delayed housing construction from really growing for 30 months. Then COVID-19 happened and the rest is history; I can’t express to you enough how everything that was supposed to go right for housing flipped negatively, and this is just one of them.
So when we look at the housing starts data, we need more context with it, and we can see that it has a much different backdrop than what we saw from 2002 to 2005, when housing starts were driven by new home sales and single-family starts on a credit bubble. Now we see a different reality with a big push in multifamily construction and a lack of complete data.
Of course, one of the issues now is that rising rates impact the new home sales sector more than the existing home market, so the builders, while not in the same situation they were in in 2002-2005, will be more cautious in building homes with the rising rate risk cancelations and future buyers. They’re at a disadvantage because their homes are more expensive than the existing home supply.
Hopefully, this article outlines the issues we have had with housing since 1996 and why it’s been hard to get inventory to grow unless we see major demand weakness and forced credit selling. I am rooting for more listings than anyone else, but I understand the limits that we have been under post-1996.
Higher mortgage rates in the past have created more days on the market and cooled down the rate of price growth, which I am hoping for again. However, the homeowner’s credit profile is much better this time around. Their cash flow is better.
They have fixed debt costs while their wages rise, an excellent hedge against all this inflation we are dealing with.
On top of all that above, they have nested equity, and more than 40% of the homes in America have no mortgage debt at all. I am hoping that if demand gets weaker, home sellers won’t be so stingy and will lower their prices because they have so much equity now. Hey, a person can hope, right!
Enjoy the Memorial Day weekend and realize that not all economic cycles run with the same playbook. We have to learn to talk about the housing market in a more sophisticated way that doesn’t have to do with an epic housing crash for clicks. Sometimes a long, painful drag is even just as bad and that home prices rising way too much is the crisis now.
Mortgage application volume for the week ending June 3 dropped 6.5%, sliding to the lowest level in 22 years, driven by weakness in purchase and refinance applications.
Despite the recent decline in mortgage rates, they were not low enough to spur refinance activity, which led to the decline of the Mortgage Bankers Association‘s (MBA’s) Market Composite Index. The refinance index dropped 6% from the previous week and was 75% lower than the same week a year ago. According to the MBA, the seasonally adjusted purchase index fell 7% from one week earlier.
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“The 30-year fixed rate increased to 5.4% after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week,” Kan said.
Purchase mortgage rates, after hitting a 13-year high of 5.27% in May, fell for three consecutive weeks, according to the Freddie Mac PMMS. Rates last week averaged 5.09%, essentially flat from the prior week, but significantly higher than the 2.99% rate during the same period last year.
The refinance share of mortgage activity rose to 32.2% of total applications from 31.5% from the week prior, according to the MBA.
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“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers,” Kan added.
In May, the inventory of homes for sale rose 8%, marking the first rebound since June 2019. Compared to May 2020, the inventory of active listings was still down 48.5%, meaning there are still only half as many homes available, according to Realtor.com‘s monthly report. The median national home price also climbed to an all-time high of $447,00 last month, jumping 35.4% year over year.
The average contract interest rate for 30-year-fixed-rate mortgages with conforming loan balances ($642,000 or less) rose to 5.40% from 5.33%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,000) rose to 4.90% from 4.93%.
The adjustable-rate mortgage (ARM) share of activity decreased to 8.2% of total applications. The Federal Housing Administration (FHA) share of all applications rose to 11.3% from 10.8% the prior week, and the Veterans Affairs (VA) loan share climbed to 11.4% from 10.2% a week earlier.
The USDA share remained unchanged at 0.5% from the prior week.
The survey, conducted since 1990, covers more than 75% of the retail residential mortgage applications.