Markets are now betting that inflation, as measured by the 12-month change in the consumer-price index, will fall to about 2.8% by October, from 6.4% in January.
Home Prices
The S&P National Home Price Index, which measures home prices across the nation, rose 5.8% in the year ended in December, down from a 7.6% annual rate the prior month. The increase was the lowest December-to-December change since 2019.
Apartment Rents
Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.
Dividend Stocks
The S&P 500 High Dividend Index—made up of the S&P 500’s top 80 dividend-paying companies—fell 1.1% including dividends last year, compared with a negative total return of 18% for the broad benchmark. In 2023, the index is up 2.5% but is trailing the S&P 500’s 4.8% advance.
Florida Condo Redevelopment
In Florida, developers are increasingly eager to buy out condo owners so they can tear down an aging property and build a new one. Some owners, especially the elderly, oppose selling and having to find a new home. Yet they may have to sell if 80% of the owners in a condominium agree to a sale.
Office Workers
Workers’ office use on average is around 50% of prepandemic levels in 10 major U.S. cities. Employee engagement—a measure of how involved and enthusiastic workers are about their work and workplace—slipped in 2022 for a second consecutive year.
CMBS Delinquencies
The delinquency rate for office loans that back commercial-mortgage-backed securities remains low, but it is heading higher. The rate last month rose by a quarter of a percentage point to 1.83%, its largest increase since December 2021.
Venture Fundraising
Venture firms raised $20.6 billion in new funds in the fourth quarter. That was a 65% drop from the year-earlier quarter and the lowest fourth-quarter amount since 2013. The amount was also less than half the level raised in the preceding three months, the first time fundraising volumes decreased from the third to fourth quarter since 2009.
Home Sales
From August to November of last year, home sales were down an average of 25% year on year for the top third of the market, but an average of just 11% for the bottom third.
Rate Outlook
Following the consumer-price print, derivatives markets showed the federal-funds rate peaking at 5.28% in August. Hopes that the Fed would cut rates several times this year faded with the benchmark rate forecast to end the year above 5.12%.