We are just so dependent on elevated asset prices/Gary Friedman speaks and some other interesting earnings comments

The Fed issued its new Q2 flow of funds statement (h/t DDB for heads up) yesterday and my favorite chart has now been updated. It is of household net worth as a percent of disposable income. It's basically measuring the level of asset prices relative to the broad economy and highlights again how inflated the former is relative to the latter and how dependent we are on that inflation as we are hugely dependent on high end consumer spending. 

As seen, it got to 614% at the tech stock market peak in Q1 2000. That was exceeded in Q4 2006 when housing prices were raging higher at 649%. Q1 2022 was the all time high at 835% after the 2021 run in both stocks and home prices and right before the rate hikes came. It now stands at 785%. 

While this benefits those that own assets, it is a major financial hurdle for those that don't. Apartment List yesterday released its 2024 edition of their Millennial Homeownership Report. It said "Today 45% of all Millennials are homeowners, a new high. But Millennials continue to buy homes at a slower pace than previous generations. By the time they reach age 30, just 33% of Millennials are homeowners, compared to 42% of Gen Xers, 48% of Boomers, and 55% of Silents, when they were the same age."

And, "Data are also emerging for Gen Z, who face a severe shortage of affordable homes. Today just 8% of Gen Z adults are homeowners, and it's still much more common for them to be living with parents than to be owning homes."

This gets to my point that while there is a flood of new apartment supply this year, particularly in the sunbelt states, it will be well absorbed and set us up for a resumption higher in rents beginning in the latter part of 2025 and into 2026. https://www.apartmentlist.com/research/millennial-homeownership-2024