Tag: Life

Data Analysis, Life

US Housing Market – Another Way to Look at Rising Interest Rates

Posted on by Josh Welch

Someone made the comment that home prices have gone down with the increase in mortgage interest rates: people just haven’t realized it.

How does one put numbers towards this statement?

Mortgage interest rates have increased):

  • Around 3.5% for 11 years (mid 2012-year end 2022)
  • Around 6.5% since start of 2022

FRED Chart source:

Note: Portland, Oregon Median House Value: $555K in March, 2021

Standard way to present increasing mortgage interest rates:

  • A $500K home, 30-year mortgage, 100% down (second chart)
    • at 3.5% monthly payment = $2,245
    • at 6.5% monthly payment = $3,327
  • Net: Buyer needs to find more money for monthly payment

Closer to the truth: a home buyer has talked to a banker prior to purchase and has a maximum monthly payment in hand.

How has the home purchase amount changed with a set monthly payment?

A $2,200 monthly payment, a buyer can purchase:

  • With 3.5% interest, purchases a $500K home
  • With 6.5% interest, purchases a $355K home

So this 3.0 point rise in mortgage interest rates, lowers the home value that can be purchased by 29% with all other variables around a home purchases staying fixed. This is the point the commentator made regarding lowering home values. Most people cannot simply increase their monthly payment to purchase a home.

Learning

Helping Me Blog: Hay House’s Book Writing Challenge

Posted on by Josh Welch

Reid Tracy and Kelly Notaras are hosting this free 4-day challenge this week. I am hoping it will help me organize my thoughts and writings around my blog. Perhaps you will be able to attend too.

Hay House is providing support: “Our Aspiring Author’s Tool Kit”:

Learning, Life

Expectations for 2023

Posted on by Josh Welch

Why not put out my guesses along with the Conventional Wisdom (CW) for various topics. Each topic will have a blog post with detailed information and source links.

China – Slow to recover after reopening with mass COVID infections. Recovery will take into 3rd and 4th Quarter.

  • Unlocked society after 3 years in late December ’22
    • No country opened faster and with so little planning
  • CW: Recover quickly in three months – at end of 1st quarter
    • I disagree, think recovery will take longer
    • Recovery from the trauma will take more time

US Federal Government Leadership –

  • CW: Gridlock is the usual, just moved to US House: I agree
  • Third year of presidency is usually flat economically

US Stock and Bond Markets –

  • Stocks largely unpredictable – movement based on crowd psychology
    • Though based on numeric market fundamentals
    • I need to explore data modeling of
      • Crowd psychology and market fundamentals
  • Best guess: -5% to -10% return for year
  • CW: Stock Market is largely unpredictable

US Federal Bank – will move interest rates up more, US will have a slight recession around 3rd quarter

  • CW: Rich will have a recession, not affect working and middle class as much
    • Wall Street (stocks and bonds) more affected
  • Myself: Inflation is taking a bite out of everyone
  • Recession Shape
    • I need to explore interactions between Baby Boomers, Gen X & Z
      • Affecting recession and US real estate values
  • Shortage of Workers
    • Why? What is the effect of the mass inflow of immigrants?
      • I need to explore US census & employment data
        • Think answer is in Baby Boomers retiring with Gen X & Z getting older

Technology –

  • ChatGPT – CW: The Next Big Thing? Or will we wait?
    • How will it be used? Unknown, TBD
    • I need to learn
  • Cookie-less online advertising and marketing still being developed
    • CW: Which company/app will dominate? Google, Meta et al addressing
    • I need to learn
  • US 5G Service – CW: Did not turn out to be The Next Big Thing
    • More stable and widely available 4G level speeds
    • My observation: More short video streaming instead of text on news sites
  • US Federal Gov. funding for chip manufacturers
    • CW: National security issue: shoring up existing industry
  • What about all the satellites launched last year?
    • My curiosity – haven’t heard recent update
  • What about iLot mentioned in press 2017-2019
    • My curiosity – haven’t heard recent update

European Union – All points are CW: Surprisingly resilient as standard of living drops

  • Jump in energy costs for all EU countries, w/Ukraine war
    • Surprisingly well received by citizens
    • Helped with fast reactions by EU governments
  • Other choice being: more steps towards war w/Russia

Interesting ‘Winners’ of the Ukraine war – All points are CW

  • India and China are purchasing the inexpensive ($60US/barrel) Russian oil exports
    • So their economies are getting a boost
    • Where EU economies are getting depressed
  • Globalization is slowing down –
    • Countries with more complete economies better positioned

That’s about it for my observations and a few predictions.

Data Analysis, Life

My “Coronavirus Overview”

Posted on by Josh Welch

We see many great articles about specific topics about the coronavirus situation. I was having trouble fitting all the details together to form an overview of the situation I could understand. So I researched, and then put together this video.

  • Combining the initial “keep the peak down” chart
  • John Hopkins University’s great work on tracking case information
    • US/Other countries & Oregon/Other states
  • Timelines over the next year
  • Some components of the situation

Hopefully, you will find the video helpful. I had a lot of fun making it!