The lost purchasing power/More mfr'g weakness/Best Buy hopeful/Other

If you didn't see, last Thursday Redfin quantified the extent at which current mortgage rates has cut one's purchasing power. They said "A homebuyer on a $3,000 monthly budget, for instance, can afford a $429,000 home with a 7.4% mortgage rate, roughly the daily average on August 23. That buyer has lost $71,000 in purchasing power since August 2022, when they could have bought a $500,000 home with an average rate of about 5.5%."

"To look at affordability another way, the monthly mortgage payments on the typical US home, which costs about $380,000, is roughly $2,700 with a 7.36% mortgage rate. The monthly payment would be $400 lower - around $2,300 - with last year's 5.5% rate."

The tough part for the current buyer is not just where mortgage rates are now but the meme stock like home price rise over the past few years that the Fed's monetary policy stoked with zero rates and massive buying of agency mortgage backed securities. And if home price gains were computed in CPI rather than rents, CPI would have gone over 10%.

On the business side, here is another sign of what the current interest rate environment is doing. The Equipment Leasing and Finance Association survey out yesterday fell almost 2% y/o/y in July as $9.9b new loans, leases and lines of credit were signed up for vs $10.1b in July 2022. The CEO of ELFA said "In the current relatively high interest rate environment in which the industry finds itself this summer, survey respondents are reporting some softness, coinciding with expectations by economists that overall investment in equipment and software will slow down in the 2nd half of 2023."