77 F
Chicago
Wednesday, September 9, 2026
Home Blog Page 3192

Iraq Combat Vet Explains Why The US Might Be Marching On The Middle East Again Soon

0
Iraq Combat Vet Explains Why The US Might Be Marching On The Middle East Again Soon

Former Army drill instructor and Iraq combat veteran ‘Angry Cops’ offers some interesting evidence that suggests the US military is gearing up for a major deployment to the Middle East. 

Where specifically?  It’s hard to say. 

While all eyes are currently on Israel and Gaza, US air forces are striking targets in Syria, naval units are intercepting drones and missiles from Yemen and tensions are rising with Lebanon and Iran

It’s clear from previous statements by US and Israeli officials that Iran is the ultimate target of the growing conflict, and if this is the case there is no doubt American troops would be involved. 

‘Angry Cops’ points out that two odd command decisions made simultaneously by two different military branches hint that the US government is about to take on a war posture, and they may deploy troops very soon…

 

Tyler Durden
Thu, 11/09/2023 – 21:20

Aussie Telco Blackout Chaos Proves Cash Still Remains King

0
Aussie Telco Blackout Chaos Proves Cash Still Remains King

Authored by Eric Abetz via The Epoch Times,

The Optus blackout proves that a small glitch in the system can cause total mayhem in a cashless society…

Modern technology is a wonderful thing … until it isn’t.

Australians experienced that truism when telco giant Optus had a substantial outage on Nov. 8, resulting in a stop to call services and any bank card transactions for several hours.

In short, the mayhem, frustration, and missed opportunities piled up in all quarters.

Some businesses, like the call centres for the banks, may have breathed a sigh of relief given they could not field calls from concerned customers after they suffered another 0.25 percent interest rate hike the day before, courtesy of the Reserve Bank of Australia.

However, for most people and small businesses, it spelled disaster. The ever so convenient “tap and go” method of making payment was removed. And without warning.

It’s a timely reminder to us all that carrying cash may be a sensible thing to do for occasions such as that experienced on Nov. 8.

Such outages have happened in the past and will happen in the future. So the wise counsel is to be prepared.

Speaking of which, it is making more and more sense to use cash as retailers and banks continue charging for the use of cards and “tap and go”—to which we were all seduced by its ease and promised “no extra costs.”

Remember when Automatic Teller Machines (ATM) delivered you cash free of charge because it saved the bank from paying wages?

Tap and go sped things up considerably for the customer, the business, and the bank. It was less labour intensive and created new savings for businesses and banks (particularly during COVID-19 we were all encouraged not to use cash because of its propensity to transmit germs).

Yet once enough of us had been lured into ATMs, rather than real live human tellers behind a counter in a local branch, banking staff was then cut and branches closed. Then, fees started to be charged at the ATM.

People queue for ATM machines outside a branch of the Commonwealth Bank in Melbourne on Aug. 8, 2018. (William West/AFP via Getty Images)

An Extra Price to Pay

Fast forward to today and the surcharges for paying with a card have been quietly introduced, meaning that the supposed “savings” for customers were now being ignored.

The surcharges vary but can be as high as a few percent on a total transaction.

In a period of cost of living pressures, those extra gouged percentages can be avoided by paying cash. A saving that could place literally hundreds of dollars back into the family budget.

Surely, the cost of a cashless transaction is far less than one that involves receiving money from the customer, giving change, balancing the till at the end of the day, and taking the proceeds to the bank for depositing.

Further, tap and go often makes the customer oblivious to what they are actually paying for. In the past, the customer would have had to dig a bit deeper into his pocket and pull out an extra coin or note making a person a lot more price aware and the merchant more self-conscious about increasing prices.

Supplied image of people using a new contactless payment app designed by Optus on a smartphone at a retailer in Sydney, Australia, on Nov. 13, 2014. (AAP Image/Fuel Communications, Optus)

From a privacy point of view, cash payments allow purchases to be made without traceability as well. But in that case, it is important to ask for a receipt as proof of purchase may become necessary.

With the federal government’s ham-fisted announcement that it will shortly outlaw cheques, it is more important than ever that the public retains access to cash and that cash transactions be accepted by all merchants.

The removal of cash from the economy will give unprecedented power to the banking institutions, as they will be able to control all transactions other than bartering.

The Royal Commission into the Australian banking sector exposed the power exercised and the moral free zone it became as profits were pursued in an ethics-free environment. It is doubtful that with even more market power, there would be a commensurate enhancement of moral and ethical standards.

The Australian Mint has announced that by Christmas 2023 the visage of the king of Australia, King Charles III, will start appearing on local currency.

This a timely reminder that cash is king and it is in every Australian’s interest to ensure it remains a viable method to undertake transactions, besides potentially saving hundreds of dollars each year.

Tyler Durden
Thu, 11/09/2023 – 21:00

“Younger Voters Have Turned Against The Governor”: Berkeley Poll Reveals Record Number Of Californians Disapprove Of Newsom

0
“Younger Voters Have Turned Against The Governor”: Berkeley Poll Reveals Record Number Of Californians Disapprove Of Newsom

A new poll from the University of California-Berkeley Institute of Governmental Studies (IGS) reveals that more Californians disapprove of the job Gov. Gavin Newsom (D) is doing (49%) than approve (44%) – the first time this has happened since Newsom took office in 2019.

By Sabo via Unsavory Agents, support here.

This marks an 11-point decline in Newsom’s approval rating since the last time IGS asked the same question in February, just nine months ago.

“This includes significant declines among the governor’s Democratic voter base and is most prominent among two of the state’s swing voter blocs – political moderates and No Party Preference voters,” according to the poll.

Younger voters have also turned against the governor, while voters ages 65 or older remain supportive.”

Poll Director Mark DiCamillo suggested the sharp decline was due to those with extreme views, “with the proportion strongly approving of Newsom’s performance declining from 25% to 18%, while those strongly disapproving climbed from 29% to 36%,” NY1 reports.

According to DiCamillo, the decline is “broad-based and is particularly noteworthy among political moderates and No Party Preference voters.”

While 66% of Democrats approve of the job Newsom is doing, just 37% of No Party Preference and 7% of Republicans approve. Support was strongest in San Francisco (53%), where Newsom served as mayor before being elected governor, and among females, with 46% of women approving of his job performance compared with 41% of men.

While 53% of voters age 65 or older continue to support the governor, younger voters are less approving. Just 35% of voters age 18 to 29 and 38% of voters age 30 to 39 approve of the job he’s doing. -NY1

Newsom’s declining approval rating comes as California struggles with budget shortfalls and other issues. Meanwhile, just 50% of California voters approved of Newsom’s recent trip to China to meet with President Xi Jinping, while 39% disapproved.

It also comes as Newsom stands accused of running a ‘shadow’ Presidential campaign to take the mantle if Joe Biden dies or otherwise isn’t the Democratic nominee in the 2024 US election.

 

Tyler Durden
Thu, 11/09/2023 – 20:40

Running On Censorship: A California Candidate Seeks To Ride The Anti-Free Speech Wave

0
Running On Censorship: A California Candidate Seeks To Ride The Anti-Free Speech Wave

Authored by Jonathan Turley,

It is not easy to unseat an incumbent in Congress, but Will Rollins believes that he has hit on a guaranteed winner to galvanize Democratic support in California’s 41st congressional district.

He is pledging to push for greater censorship to stop those “profiting by spreading division based on lies.”

Of course, the former assistant U.S. Attorney suggests that he will know who is lying and who should be allowed to speak freely.

Rollins is also running on his role “prosecuting insurrectionists” from January 6. While most of us condemned the riot on that day and supported the prosecution of those who broke into the Capitol, polls show that most Americans do not view what occurred as an actual insurrection or rebellion.

That, however, is a legitimate matter of debate and people of good faith can differ in how they view the crimes committed that day. What is far more serious is the embrace of censorship as a political cause.

Rollins pledged to stop people saying things that “erode our democracy.” His policy platform promises “accountability” for tech platforms that “spread conspiracy theories” and do not yield to demands for censorship. It appears to be a pitch to restore censorship systems on sites like X but also pledges to go after “media outlets.”

He is not alone in such efforts. Democratic members caused a firestorm previously by writing to cable carriers like AT&T to ask why they are still allowing people to watch FOX News. Rollins promises to crackdown on “propaganda networks to protect the public’s right to be informed.” He does not identify which networks would be targeted, but the assumption is that it is not MSNBC. (For full disclosure, I am a legal analyst on Fox News). However, he wants ramped up penalties for anything that he considers “harmful lies and conspiracy theories.”

Of course, one person’s “conspiracy theory” is another person’s news. It is again unlikely that Rollins will be pursuing the Washington Post which recently reaffirmed that it is standing by past false claims made about Lafayette Park, the Hunter Biden laptop, and Russian collusion. Rollins is not likely referencing the false conspiracy theories funded by the Clinton campaign like the Alfa Bank allegations.

As someone who was raised in a liberal, politically active Democratic family in Chicago, I remember when the party championed free speech as a touchstone of the party. Now it is often treated as an existential threat to democracy.

In recent hearings on the government’s censorship programs, Democratic members and pundits attacked witnesses as “Putin lovers” or supporters of “insurrectionists” in opposing censorship.

President Joe Biden is now arguably the most anti-free speech president since John Adams. His administration is unabashedly and unrepentantly pursuing the silencing of those with opposing views. Jen Easterly, who heads the Cybersecurity and Infrastructure Security Agency, extended her agency’s mandate over critical infrastructure to include “our cognitive infrastructure.” That includes combating “malinformation” – described as information “based on fact, but used out of context to mislead, harm, or manipulate.”

Democratic members have warned social media companies that they will not tolerate any backsliding after Elon Musk dismantled the massive censorship system at Twitter.

In one hearing, tech CEOs appeared before the Senate on past censorship. Sen. Chris Coons (D-Del.) pushed back on statements from the witnesses suggesting an effort to protect free speech and reminded them that “the pandemic and misinformation about COVID-19, manipulated media also cause harm” as well as “climate change misinformation policy” and “climate denialism.”

It did not matter that many censored over their views on the efficacy of masks or the necessity of shutting down schools have been vindicated. Even raising the lab theory on the origin of Covid 19 was denounced as a conspiracy theory. Even after the theory was embraced by government agencies as possible or the most likely explanation, science and health reporter for the New York Times, Apoorva Mandavilli,  continued to denounce the theory as “racist.”

The concerning aspect of Rollins’ campaign is that censorship was largely used as a political tactic in Washington to silence critics and opposing views. It is now an actual political campaign. It shows how speech regulation has become popular with the rank-and-file in the party. It now defines the party.

Campaigning for censorship should be a warning sign of the breakdown of democratic values. Limiting free speech is akin to cutting off oxygen to the body politic. It produces atrophy in a system, the breakdown of our political tissues. That is also reflected in a recent poll that shows that 52% of Biden supporters say Republicans are now a threat to American life while 47% of Trump supporters say the same about Democrats. Roughly 40% of both parties believe violence is now justified and roughly a quarter of both parties now question our system of government.

Politicians fuel that anger by running on silencing their opponents in the name of disinformation or malinformation. It is of course popular. Rage is often popular. Indeed, it can be addictive. Yet, what remains is release from reason in the blind pursuit of those with opposing views.

Will Rollins is right that this is a popular pitch for an age of rage. However, it is the political version of the Dead Sea Fruits that were irresistible to pick but would turn to ashes in one’s mouth. Silencing others creates an insatiable appetite for combating an ever widening circle of “lies.” Until, that is, when you find yourself encircled by your own truth police.

Tyler Durden
Thu, 11/09/2023 – 20:20

The Delta Between New York City And New Jersey Rents Across The River Is Narrowing

0
The Delta Between New York City And New Jersey Rents Across The River Is Narrowing

If you still thought you could still escape the astronomical rents in New York City by the time-honored tradition of hopping across the river to Jersey City, your window of time may be coming to an unceremonious close. 

According to data from rental platform StreetEasy, the median rent in Jersey City, located directly across from Manhattan, soared to $2,850 last month. This represents a staggering 48% increase since January 2020, surpassing the growth rates of the majority of neighborhoods in New York and nearly a hundred other principal cities.

In other words, rents are growing quicker than in New York City, meaning the delta between the two locations is narrowing, according to Bloomberg.

StreetEasy economist Kenny Lee told Bloomberg: “The opportunity for rent arbitrage in New Jersey has been going away.”

Their report caught up with several people who tried to make moves to save money. One person was Angel Njoku, who moved to Brooklyn after her rent in Jersey City went up $125 to $3,795 per month. 

“‘I was like, ‘There’s no point living in New Jersey’. I’m basically paying New York prices, why not just live in New York?” she told Bloomberg. 

One realtor told Bloomberg that, as of 2019, a one-bedroom apartment in Hoboken, New Jersey typically remained available for around 14 days before being rented out.

The Bloomberg report notes that these units are being snapped up in nearly half that time and at markedly increased rates, as the inventory of available rental properties has shrunk by one-third. A notable case, as mentioned, is an apartment that once would list for $5,500 and might have been offered two or three times is now commanding a rent of $8,500.

“The lack of housing is crippling people,” the agent commented.

After a 35% rent rise on their two-bedroom Jersey City apartment, 32 year old Oliver McAteer, and his wife renegotiated to $4,150 temporarily. Post their daughter’s arrival in spring, they purchased a house in Maplewood, New Jersey, with a mortgage matching their rent.

McAteer told Bloomberg: “Everyone was coming over from Brooklyn, making Hoboken and Jersey City the new Williamsburg. What surprised me was how quickly it changed. It was such a shame that so many people got driven out.”

Tyler Durden
Thu, 11/09/2023 – 18:00

Watch: Biden DHS Head Claims There Is “No Disaster” At The Border

0
Watch: Biden DHS Head Claims There Is “No Disaster” At The Border

Authored by Steve Watson via Summit News,

Despite record numbers of encounters will illegal immigrants crossing the southern U.S. border in their thousands every day, including suspected terrorists, the head of the Biden Department for Homeland Security claimed under oath Wednesday that there is “no disaster”.

Alejandro Mayorkas made the claim while testifying before Congress regarding the border security budget and spending, and asking for more funding.

GOP Senator John Boozman told Mayorkas that “by every metric the situation at the border is a disaster,” adding that “what you’re asking for does nothing to get those numbers down.”

Mayorkas attempted to pivot the exchange to suggest Republicans are resistant to providing funding to hire more personnel at the border.

Senator Cindy Hyde-Smith further asked Mayorkas: “So the situation at the border, you’re saying, is not a disaster?”

“That is correct,” Mayorkas then answered.

Mayorkas was further pressed by other Senators about whether he sees the border situation as a crisis and again failed to respond:

Does this look like a crisis/disaster nor not?

*  *  *

Brand new merch now available! Get it at https://www.pjwshop.com/

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support my sponsor – Summit Vitamins – super charge your health and well being.

Also, we urgently need your financial support here.

Tyler Durden
Thu, 11/09/2023 – 17:40

Time For A Generator? New Warning Says Half Of US At Risk Of Grid Down This Winter

0
Time For A Generator? New Warning Says Half Of US At Risk Of Grid Down This Winter

The 2023-24 Winter Reliability Assessment (WRA) report by the North American Electric Reliability Corp. warns of a heightened risk of “insufficient energy supply” during extreme cold spells. This concern extends over large swaths of the US and Canadian power grid, affecting approximately 180 million people. Those living in the highlighted regions should consider securing backup power generation sources. 

Power grid operators from Texas to New England are “at risk of insufficient electricity supplies during peak winter conditions,” the report said. 

The report continued that the reliable operation of the Bulk Power System (BPS) and the availability of fuel for natural gas-fired generators are at risk during severe, widespread cold snaps. It said that recent winter incidents have shown that over 20% of generating capacity can be knocked off online by freezing temperatures in areas of North America that are not accustomed to such cold. When power supplies are limited, BPS operators may experience a sharp rise in demand due to the increased use of electric heating systems in colder temperatures.

According to Bloomberg, this year’s WRA is “even more dire than last year’s report, which said a quarter of Americans were at risk of cold-weather power emergencies. It includes for the first time some of the most densely populated areas on the East Coast, a region that relies heavily on natural gas as it transitions to renewable energy. Gas generators there widely failed during a brief but fierce winter storm last December because they broke down or couldn’t get fuel.” 

Earlier this year, PJM Interconnection, the power grid operator in 13 states that stretch from Illinois to New Jersey with over 65 million customers, published a study that found an alarming trend of state and federal decarbonization policies across the grid that “present increasing reliability risks during the transition, due to a potential timing mismatch between resource retirements, load growth and the pace of new generation entry.”

America’s rising grid vulnerabilities come as the National Oceanic and Atmospheric Administration recently released a new forecast that shows El Nino conditions this winter could produce wetter-than-average conditions across Mid-Alantic states. 

The shift towards ‘green energy,’ with the phasing out of fossil fuel generation in favor of unreliable solar and wind power, contributes to the risks of a grid-down event in freezing weather. It also comes as power demand surges while more Americans than ever are charging their EVs. 

But the Biden administration was supposed to bolster the nation’s power grid with billions of dollars in green spending… If that was the case, there wouldn’t be these warnings. 

For those living in states now susceptible to elevated risks of grid-down events due to cold weather, consider a home generator. Additionally, securing a Starlink for backup internet could make life easier. 

Tyler Durden
Thu, 11/09/2023 – 17:20

How The Billionaire Elite Manipulate The World

0
How The Billionaire Elite Manipulate The World

Authored by Raymond Ibrahim via AmericanThinker.com,

What is ultimately behind so many of the (manufactured) ills currently plaguing the West, from leftist lunacy and gender insanity to unnecessary lockdowns and wars?

In a word, the ultra-rich — the billionaire elite.  So argues bestselling author Hanne Nabintu Herland in her latest book, The Billionaire World: How Marxism Serves the Elite.

In a series of brisk chapters, Herland — a historian of religions and founder of The Herland Report — traces all the world’s major problems back to the billionaire elite and their use of Marxist repression and social engineering. 

While this may seem counterintuitive, Herland makes — and documents — several powerful arguments. 

The fact that a tiny elite control much can be seen in that  even seemingly opposing and competing brands, such as Coke and Pepsi, are usually owned by the same company, says Herland.  The same applies to supposedly opposing “leftist” and “rightist” media. Six corporations control 90% of all U.S. media. As for the political arena, the “richest 0.01% have accounted for 40% of all campaign contributions through corporate donations.”

In short, “These mastodonte private companies completely dominate our way of life, what we eat, drink, watch on TV, what we wear, and who we vote for.”

Little wonder that, no matter what happens in the world, and no matter how such developments are detrimental to the average person, the ultra-rich tend to only get richer. According to Herland, “82% of all wealth generated in 2017 went to the richest 1% among us, while the poorest world population of 3.7 billion saw no increase in wealth.” 

But it’s worse than that; there seems to be a direct correlation between how much poorer the average man gets and how much richer the billionaires get.  Writes Herland,

[T]he richest among us made billions of dollars on the COVID-19 world tragedy, while the world’s poor plunged into unimaginable poverty…  The shutdown strategy made the billionaires’ profit soar.  In the span of just a few months in 2020, Bill Gates made $75 billion, Jeff Bezos $67.9 billion, Mark Zuckerberg $37.8 billion, and Elon Musk $33.6 billion.

Meanwhile, 48% of small business owners in America experienced severe economic turmoil — with fully one-third of them going bankrupt, and with Black-owned businesses suffering disproportionately — due to this lockdown that otherwise profited the billionaires.

From a macro-historic perspective, the  West is slowly regressing, and the ultra-rich are becoming “the globalist version of feudal lords, as the new Western slave class emerges beneath them.”

But how did this lamentable state of affairs comes to pass in the first place?  Marxism — in its myriad forms and iterations — is Herland’s answer.  Since the 1960s, beginning with the “free sex and drugs” movement, Marxism, especially in the guise of godless materialism, has wormed its way into Western culture, poisoning, corrupting and destroying everything that originally made the West great, and therefore making it ripe for the most powerful — meaning the richest — to manipulate and control.   Writes Herland,

The Marxist attack on historic Western values has weakened the very core of our culture, destroyed social stability and the family, quenched free speech and silenced the people — and thereby removed the obstacles for the billionaire class to gain centralized control… The combination of strong private corporations coupled with political socialist ideologies has pushed for a radical groupthink model in which the population is expected to agree with the consensus — not unlike that which we witnessed during National Socialism in Germany before and during World War II.”

Marxism is especially apt at exploiting any environment where freedom and liberty erode and are replaced with groupthink.  In the words of Vladimir Lenin:

We must be ready to employ trickery, deceit, law-breaking, withholding and concealing truth… We can and must write in a language which sows among the masses hate, revulsion and scorn towards those who disagree with us.

It needs no great expounding to say that these tactics dominate all social and political discourse today — more than a century after they were first written down.

There is much more to recommend Herland’s Billionaire World. Almost every pressing topic — including the politicization of science, the rise of (openly Marxist) groups such as Black Lives Matter (BLM), the global persecution of Christians, the stoking of racial tensions, and the rewriting of history — is connected to the overlooked role of the billionaire elites and their self-serving agendas.

*  *  *

Raymond Ibrahim, author of Defenders of the West and Sword and Scimitar is the Distinguished Senior Shillman Fellow at the Gatestone Institute and the Judith Rosen Friedman Fellow at the Middle East Forum.

Tyler Durden
Thu, 11/09/2023 – 17:00

Fed’s Emergency Bank Funding Facility Explodes Higher, QT Stalls As Money-Market Funds Hit Record High

0
Fed’s Emergency Bank Funding Facility Explodes Higher, QT Stalls As Money-Market Funds Hit Record High

Money-market funds saw inflows for the 3rd straight week (since the biggest outflow since Lehman), adding $16.9BN to reach a new record high of $5.71TN

Source: Bloomberg

In a breakdown for the week to Nov. 8, government funds – which invest primarily in securities like Treasury bills, repurchase agreements and agency debt – saw assets rise to $4.66 trillion, a $9.63 billion increase.

Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile saw assets climb to $926 billion, a $6.35 billion increase.

Retail fund inflows continued unabated (and institutions saw their 3rd straight week of inflows)…

Source: Bloomberg

The resurgence in money-market fund inflows is diverging from bank deposits (which are gently rising on a seasonally-adjusted basis)…

Source: Bloomberg

Meanwhile, as we detailed earlier, the amount of money that investors are parking at The Fed’s reverse repo facility dropped below $1 trillion for the first time in more than two years.

Source: Bloomberg

It marks a steep decline from a record $2.554 trillion stashed on Dec. 30 and is the smallest sum since August 2021.

“It’s a big number,” said Deutsche Bank strategist Steven Zeng, referring to the decline past $1 trillion.

“I can see it falling further with dealers owning so much of the new bond.”

Demand for the facility, however, has been fading this year as the Treasury ramped up fresh bill issuance, offering an alternative for short-term investors.

But as Bloomberg notes, as usage of the Fed’s facility fades, Wall Street strategists are weighing whether there will be further impact on the central bank’s policy decisions. If demand falls toward zero, strategists say, the Fed will have to halt its quantitative tightening program because excess liquidity will have been completely drained and bank reserves will have reached a point of scarcity.

The Fed’s balance sheet contracted by a very modest $6BN last week (the balance sheet is now down over $1.1TN from its highs…

Source: Bloomberg

The Fed’s QT program stalled last week, with its securities-held RISING by $313BN…

Source: Bloomberg

Most notably, usage of The Fed’s emergency funding facility for the banks soared higher by $3.9BN to a new record high above $113BN… (the biggest jump since June)

Source: Bloomberg

Of course, having seen equity market capitalization crash back to earth and recouple with bank reserves at The Fed, this week saw equities bounce higher as reserves also increased…

Source: Bloomberg

Finally, we note that after Bill Gross apparently ‘called the bottom’ in regional banks last week, their share prices all jumped initially, but FHLB issuance limits and general risk-off has them giving some back. And we just remind those buyers that bond yields have exploded higher since SVB…

Source: Bloomberg

…and they are borrowing ever more ($113BN) from The Fed at an expensive rate to fill the holes in their balance sheets. Does that sound like the bottom is in?

Tyler Durden
Thu, 11/09/2023 – 16:40

How Affluent Homebuyers Are Keeping Luxury Real Estate Market Afloat

0
How Affluent Homebuyers Are Keeping Luxury Real Estate Market Afloat

Submitted by Sam Bourgi of CreditNews

Undaunted by rapidly rising mortgage rates, many rich Americans haven’t given up on their poolside pads and high-end condos just yet. Luxury home prices climbed 9% to hit $1.1 million, the highest third-quarter level ever recorded, reports Redfin. That’s almost three times faster than the price growth of non-luxury homes, which made it to a median $340,000 in the third quarter.

And while the overall housing market has been cooling thanks to a dwindling supply of affordable properties and mounting rates on home loans, the market for homes in higher price tiers has been chugging along relatively well.

“Wealthy homebuyers have more tools to weather the storm of high mortgage rates,” says Redfin senior vice president of real estate operations Jason Aleem.

Of course, their most powerful tool comes down to bucketloads of cash.

Affluent buyers have big cash cushions

Mortgage rates moving closer to 8% have pushed many middle-income Americans out of the housing market this year.

In the meanwhile, people who purchased homes and locked in 3% mortgage rates in 2020 and 2021 are now reluctant to sell, keeping inventory tight and prices high.

But some wealthy buyers can afford to sidestep high interest rates by shelling out the cash upfront. Bloomberg reported in September that the wealthiest 20% of Americans haven’t used up their excess pandemic savings just yet, citing Fed data.

And Redfin reveals over 42% of luxury homes were purchased in cash in the third quarter, up from 34.6% the same period last year.

The analysis defines luxury homes as those estimated to belong to the top 5% of their respective metro area based on market value, with non-luxury homes categorized as those estimated to be in the 35th to 65th percentile.

Other buyers could be opting for the riskier play: taking on a mortgage with a higher rate now, in the hopes they can refinance into a lower rate in the future—an option that many lower-income Americans can’t afford, Aleem notes.

“Affluent Americans are still spending big, in large part because of pandemic savings and resilient housing and stock values,” he explains.

While the supply of non-luxury homes for sale has shrunk by an alarming 20.8% since last year, active listings of luxury homes have risen nearly 3%.

There’s been a notable rise in homebuilding as well, with the number of housing starts rebounding in September by 7%, compared to the previous month, according to the latest government data.

Newly-built homes often fall into the luxury category, adding to its strong inventory.

But this trend might not last

Experts say some wealthy buyers could start pulling back if affordability conditions don’t improve.

“While many luxury buyers have the resources to forge ahead even when mortgage rates are elevated, stubbornly high rates and home prices will likely push some affluent house hunters to the sidelines in the coming months,” said Redfin chief economist Daryl Fairweather.

“High costs, along with the uptick in the number of high-end homes for sale, could cause luxury price growth to cool.”

And new construction could slow as well, with confidence among single-family homebuilders tumbling to a nine-month low in October due to ebbing demand, according to the National Association of Home Builders and Wells Fargo Housing Market Index.

“In the very short-term, single-family construction activity is likely to increase with permits rising in every month of 2023 thus far, but at some point mortgage rates are likely to put a lid on new construction activity for home purchase,” Conrad DeQuadros, senior economic advisor at Brean Capital in New York, told Reuters last month.

Redfin also notes that luxury home sales fell 10.6% in the third quarter compared to last year.

Although this figure is markedly smaller than the 17% plunge in non-luxury sales, it’s indicative that some wealthy buyers are already retreating in the face of high mortgage rates.

Tyler Durden
Thu, 11/09/2023 – 15:25