The Wednesday Letter #219 - 5/8/2024

This Week: US Housing; Panama's Important Position; Apple's Quarterly Earnings; Starbucks Fear; Boomerang CEO'S; Trump Media and Technology Group.

US HOUSING

US housing has entered a new phase in the current year. In the immediate aftermath of the pandemic, home prices raced upward due to 1) more people heading to the suburbs and exurbs and the work-from-home trend, 2) super low interest rates, and 3) investors buying homes to rent them out.

Looking at these three today, the first, work-from-home (WFH) has lost its allure with both employers and workers. WFH was perfect during the pandemic but the various parties have decided (wisely in our view) that it is more difficult to build a team and to have it function cohesively when everyone is working remotely. WFH has morphed into hybrid work (part remote, part in-office) or into a full-time return to the office.

The second, super low interest rates, is as we know a thing of the past. 30-year Treasury yields have shot up from 1% in 2020 to 4.7% now. And 30-year fixed mortgage rates have moved from 2.5% to over 7%. Homebuyers today are getting a lot less for their dollar than homebuyer…