Above the Fold

Has the 2022 Housing Market Outlook Changed?

Yes, rates are rising, and yes, the stock market has gotten a little more volatile (which most were already anticipating), but will the venerable housing market change course? According to several sources and our own research, America’s real estate landscape is likely to remain relatively strong. While it’s unlikely to match 2021’s record performance, sellers should continue to maintain the upper hand, allowing for continued price increases. Digital realtor Zillow projects home values to rise 11% in the coming year, with the Sun Belt receiving the most price appreciation. Zillow also sees increases in secondary markets in the region as larger Sun Belt metros like Austin and Phoenix price out buyers.

Rent rates are expected to continue to rise, which could actually motivate more would-be homebuyers to take the plunge and purchase. But those who stay in the rental market may have a tougher time saving for that dream home. What was a great re-centralization of urban American cities is now shifting back to the sprawl first experienced after World War II as flexible work options allow consumers to live just about anywhere … and bigger spaces for remote work are more affordable the further they are from the city. 

And finally, new home supply is likely to remain limited as the cost of goods continues to rise and as home builders struggle to produce new inventory. These factors, along with the increased price of what it costs to build even a basic home, should continue to support baseline prices.

Three Things 

1. Escalating Tensions in Ukraine Fueling Volatility – Fast-growing tensions between Russia and Ukraine are fueling volatility across several market sectors and commodities. While Ukrainian officials are urging citizens to stay calm, there is an increasing military buildup on both sides of the border. After gaining sovereignty from the former Soviet Union in 1991, Ukraine has faced a myriad of challenges in recent years, starting with a revolution in 2004. Though de-escalation talks have largely failed, both sides have agreed to continue to work toward diplomacy, although Russian President Putin’s past actions leave most Ukrainians’ trust lacking. 
2. Boeing Wants to “Wisk” You Away in an Air Taxi – Aviation behemoth Boeing just committed another $450 million to air taxi startup Wisk Aero. The cash infusion makes Wisk one of the most well-funded AAM (advanced air mobility) companies around. Wisk was formed in 2019 between Boeing and flying taxi company Kitty Hawk, funded largely by Google co-founder Larry Page. The company hopes to start a full-scale commercial air taxi business within five years, eventually expanding to 14 million flights annually across 20 major global markets. 
3. Does Your Google Phone Track You Even When It’s Not Supposed to? – Lawsuits filed by Washington, D.C. and three other states allege Google tracked consumers’ whereabouts even if they opted out of location history or had other location-related settings set to “off.” Google says that the lawsuits are based on “inaccurate claims and outdated assertion about [its] settings,” but are still likely to add ammo to regulators’ desire to rein in big tech’s reach into our private data. 

Did You Know? 

Market Corrections Are More Common Than You Might Think

Investors may be feeling uncomfortable with the recent selloff in stocks, but history shows that drops of 10% or greater are a fairly regular occurrence and tend to be part of healthy bullish trends. From 2000 to 2020, there were 12 corrections greater than 10%, with an average pullback of 15% or so. This means that corrections occurred 60% of the time, and in 17 years of the nearly 21-year period, stocks ended the year higher.