With the Fed’s expected interest rate hikes today, earnings reports from some of the biggest companies in the world later this week, and economic reports on GDP tomorrow, it’s safe to say there’s a lot going on.
In fact, there’s so much on this week’s schedule, there’s little doubt that some stuff could slip through the cracks. So, today, we make sure you don’t miss a particularly important reading.
We’re talking about the real estate industry of course, and the fallout from the recent S&P CoreLogic Case Schiller National Home Price Index.
Used to measure the monthly change in prices for single-family homes in America, this index is a barometer for trends in the industry.
With a two-month data lag, yesterday morning, we received the results for market growth from April to May. Unfortunately, the results weren’t surprising, given the broader macroeconomic landscape.
In May 2022, home prices were 19.7% higher than in May 2021. While this may seem like a positive for the industry, it represents the second consecutive month with slowing increases.
Given the fact that interest rates are nearly twice as high now as they were a year ago, the cost of borrowing for a mortgage continues to increase. (Don’t let headlines claiming “mortgage rates saw greatest decrease since 2008” fool you… they’re still higher than ever.)
Meanwhile, inflation has families strapped for cash, which means the competition for buyers is lessened. The result is an increasing number of buyers cancelling their purchase contracts to stop the transaction. And mortgage demand has dropped to a 22-year low.
Where the market during the bulk of the coronavirus pandemic was hotter than Texas this month, many expect recent cooling trends to continue until the greater economy gets a hold on inflation.
So, if you’re in the market for a new home, let’s hope you’re paying in cash or can wait a little while for prices to cool down further. But, if you’re in the market to invest in property, you’re in luck.
There are currently 25 different real estate companies with active Reg CF or Reg A+ crowdfunding campaigns.
From modular homes to printable homes, sustainable infrastructure solutions to emerging proptech platforms – there is a wealth of opportunity for the crowd to throw their hat into the real estate ring without having to worry about the price of mortgages.
We recently featured one of the best ones to Angels & Entrepreneurs Network Lifetime members. Click here to learn more.
Best of all, few industries are as ripe for disruption as real estate. For everyone who fattened their pockets on the current system, there is a long line of others prepared to do the same by bringing new solutions.
That means angel investors should be more tuned in to the industry than ever. Because, even though the greater market might be cooling down, the opportunity to find success is as hot as ever.