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Saturday Morning Coffee with CFG


Everyone is talking about inflation in gas, groceries and real estate.

Now, as interest rates have gone up, we have seen inflation start to peak and enthusiasm in the housing market normalize.

Dare we say it’s starting to become a buyer’s market?

Fuel Up! 🚀

Americans Buying Less Gas As Prices Remain High 

Recent data has shown “fundamental changes” in how Americans have adjusted to higher gas prices – they’ve cut their miles.

Americans’ gas consumption has decreased by around 750,000 gallons per day as the price of gasoline has climbed nearly $1.50 per gallon from a year ago.

Other cost-saving measures have included working from home or buying a more fuel-efficient vehicle.

Flying Anytime Soon? Maybe Don’t Check Your Bag 

Increased numbers of international travelers and a slow rehiring process following pandemic-driven layoffs have created a perfect storm of lost and undelivered baggage throughout the world.

Lost luggage claims have risen 67% year-over-year on U.S. airlines to 6 in 1,000 bags, and 24% worldwide to about 8.7 in 1,000 bags. That’s nothing compared to a baggage handling company hired by Qantas in Australia, who says the Qantas flights in Sydney lose 1 in 10!

Experts suggest buying tracking devices for luggage and taking photos of valuables for insurance claims if you must check a bag. Otherwise, pack lightly and carry your bag onboard until airlines hire and train new staff members.


Over the last few weeks, we’ve seen the market digest a 75 bps interest rate hike in the country’s base interest rate – the federal funds rate.

The Federal Reserve is trying to regain confidence and wrestle inflation down before it becomes fully embedded in the country’s psychology.

Housing/shelter makes up around 30% of the Consumer Price Index for inflation, so the ~40% growth in home prices over the last 2 years is certainly an inflation culprit.

Existing Home Sales came in weaker than the already lower expectations, signaling that the Fed’s higher rates have taken the wind out of the sales in the housing market.
Existing Home Sales – Last 25 Years

The power dynamic is beginning to shift back toward home buyers in terms of price negotiation.

Buyers may remain hesitant as prices have jumped, and they fear a collapse like ‘08 – especially as their crypto and 401(k) portfolios have already entered a recession this year.

However, if home values follow the same pattern as the ‘70s/’80s inflation comparisons, home prices could hold their ground even as sales slow.

This means buyers are paying more than they would have during COVID, but they’re also beginning to have more choice and flexibility as those looking to sell have less liquidity and demand for their homes.



  1. Housing Starts Fall To Two-Year Low
  1. NAHB Urges Congress To Act On Several Fronts To Ease Housing Affordability Crisis
  1. June Purchase Mortgage Applications For New Homes Decreased 12%
  1. Existing-Home Sales Slid 5.4% In June

US Foreclosure Activity Increases In First Six Months Of 2022

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