Ilyce Glink's Love, Money + Real Estate #23

It's a race to the end of the year. Are you ready for 2024?

Dec 26, 2023

Greetings. Welcome to the end of 2023.

What a strange year it has been:

This is the year everyone became officially sick of the pandemic, even as new strains of Covid-19 emerged. You could feel a return to normalcy in the return-to-office demands made by CEOs across the country, even as their workforces resisted (to some extent). Experts declared that hybrid offices (in-person and WFH) were here to stay.
Inflation came down significantly. But consumers believe it’s still high and are extremely worried about sky-high prices for food, fuel, and just about everything else they want to buy. And, it’s true: Stuff costs about 20% more than it did a few years ago, according to the Consumer Price Index.
Mortgage interest rates fell from their 7.6% high in early November (according to FRED) and are now below 7% percent (though you’ll find them in the mid 7% range if your credit score is 700, the country average). The entire mortgage industry, which has seen huge layoffs this year, is hoping lower interest rates tempt homeowners to list their properties.
But that’s unlikely given that the vast majority of homeowners have mortgages of 5% or less. (Many are at 4 percent or below). That means they’re unlikely to be tempted to list their homes until interest rates drop significantly.
Which could happen, since the Federal Reserve Bank has indicated it will lower the federal funds rate three times in 2024. Even as Fed Reserve Bank members tried to downplay that statement.
But home prices continued to rise, impacting affordability. You’d expect the opposite, given high interest rates. But no. The U.S. is short around 4 million homes, according to the National Association of Realtor’s chief economist, Lawrence Yun, give or take a few hundred thousand.
The jobs market notched another victory this year. Unemployment touched 3.4% in 2023, a 50-year record. And, there are plenty of jobs available, just in case you or someone you know is looking for a new opportunity.
The stock market is on a tear. 2023 had an almost unprecedented rally. As of today, NASDAQ is up 43%, the DOW is up 12% and the S&P500 is up 23%. Gold hit a new high of $2,100 per ounce, before falling back a bit. Remember, though, what goes way up, will eventually revert to mean.

In short, Americans gained a record amount of wealth this year, but don’t feel secure financially. Inflation and gas prices are down, but we see our food bills going up. And, war is all around us: Israel vs. Hamas, Russia vs. Ukraine, plus other areas of political instability.

Some 59% of Americans (responding to a Bankrate survey) said they felt as though they were experiencing a recession. As we hurtle to the end of another year, what does it all mean? Why is there such a split in what we’re experiencing and what we sense is happening all around us?

Christmas Spending Spree

You’d never know that nearly two-thirds of Americans feel as though we’re in a recession based on the spending we did this holiday season.

According to the New York Times, retail sales increased 3.1% from Nov. 1 to Dec. 24, compared to the same year earlier (data from Mastercard Spending Pulse).

Interestingly, the amount of debt usually charged during the holidays was less than in the past few years.

Lending Tree’s annual holiday debt survey found that 34% of Americans went into debt this holiday season, but they’re carrying the lowest amount since 2017. Despite this holiday cheer, the majority used credit cards to pay for the holidays — many with significant interest rates.

Key finding from the Lending Tree press release: The average amount of debt added this year was $1,028, compared with $1,549 last year. It was the lowest amount since 2017.

How much did you spend on Christmas this year?

New Year’s Resolutions from ThinkGlink.com

Every year, I create some New Year’s resolutions for those who are thinking of buying or selling a home. I also write a few for those who are looking to reinvent or just improve their personal finances. If these are your goals for the new year, here are some resolutions you may want to adopt.

2024 Personal Finance Resolutions

2024 Home Buyer Resolutions

2024 Home Seller Resolutions

Did you make any resolutions for 2024? Share them:

Creating Positive Energy in 2024

It’s easy to fall into a negative energy loop that feeds on itself. You jump from one negative piece of news to the next, without appreciating all the good that’s already part of your daily life.

I’m finding myself getting sucked into the negative news cycle, and the next after that, and then suddenly find I’ve been doom-scrolling for an hour. It’s hard breaking out of that. It feels almost disloyal somehow to not be constantly up to date on the latest news and happenings.

But….

A negative energy loop isn’t going to make the world a better place. And, it isn’t doing much for my own world. So my personal New Year’s resolution is to find more ways to bring sunlight into darkness. I don’t know what that will look like, but even as our planet warms, a little more sunshine goes a long way.

If you’ve got some suggestions, I hope you’ll leave them in the comments. In the meantime, watch for a more frequent cadence of newsletters from the ThinkGlink and Best Money Moves stable in 2024, as well as new videos at my YouTube.com/expertrealestatetips channel.

Wishing you a happy, healthy, and fun 2024.

Love, Money + Real Estate