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To see current market stories scroll down for up to the minute stories and news regarding the stock markets and the interest rate markets.  The following charts show the current Real Estate Trends for the Greater Sacramento Area.

Statistics are for the Greater Sacramento area including Sacramento, Yolo, Placer and Eldorado Counties

How Higher Priced Homes and Technology Killed Inflation:
It has long been the Federal Reserve's Policy to fight inflation by raising interest rates to slow consumers from spending too fast and causing inflation.  So you might ask why with housing prices rising to an almost unaffordable high that the Fed (the Federal Reserve) has not raised interest rates to combat such high housing prices.  Well, the answer might surprise you or it might just be so obvious that you slap your economic head and say wow that's right.  Inflation is a rise in prices of consumer goods and services over time given in a percentage of gain from month to month or year to year.  The rise in housing prices can and is quantified the same way, however, the big difference between goods and services and Housing prices is that consumers need the basics every month like food, consumer goods, and services from plumbers, electricians, etc., but consumers don't buy houses every month.  On average people stay in their housing for an average 5-7 years thus not being affected by housing prices until it is time to move.  In addition, when housing prices go up and people stay in their homes for an average of 5-7 years they end up realizing price gains on their existing home and this is called realized equity.  So when the prices of goods and services increase month to month consumers need the basic items to live so they will buy them realizing no equity as these items are consumed. 
     Household income plays a factor in inflation as well as the more money people make the more they tend to consume.  So if America on the average is making more money they will consume more creating a higher demand for goods and services thus prices will rise to offset the higher demand.  So why doesn't such high priced housing effect interest rates?  Simply put housing is not something consumed it is an asset that has trade value or equity.  In addition, people are not in need of purchasing housing every month or every year for that matter. 
     It has long been the Federal Reserve's policy to keep inflation around 2% and since the 1970's the Fed has done a great job of keeping in check.  However, I believe there are other factors in play the Fed is not taking into consideration.  I will say that the high priced housing has used up far more of the average household budget thus leaving consumers less money to buy goods and services with.  This may either be by design, but I would contend that it is actually a happy accident in the Fed's favor. If you are spending the majority of your income on your housing expenses that leaves you with less money to buy goods and services.  In addition to that technology is such a big part of today's world that people don't need or want for more personal items to keep them entertained or fulfilled thus lower demand for certain physical items.  It is tough to have inflation if the demand for things goes away and that is what technology has done.  An example are college kids these days. College kids need to eat, drink and study, but with their smartphones, they can get everything they need on that device delivered to their door and their entertainment is at their fingertips.   Technology has slowed the need or the demand for goods and services and by doing so has slowed inflation.  I hope this has enlightened you on how the markets work and how they change.  I will predict that we see some changes in the Federal Reserve's approach to fighting inflation by raising interest rates in the future with the onset of even newer technology advances.     

Current News Feeds:

Current Market News:
 
Bank of America rate strategist says trade, inflation drove global forecast cut
5/23/2019 2:13 PM
(Please visit the site to view this media)BofA's Mark Cabana discusses the bond spike on trade tensions. Trading Treasurys now, with CNBC's Seema Mody and the Futures Now traders, Scott Nations and Jim Iuorio, both at the CME....(Read More
 
Don"t miss this crucial step if you"re buying a home for the first time
5/23/2019 2:13 PM
(Please visit the site to view this media)How to start your home-buying search on the right foot, according to Josh Altman, millionaire real estate agent and host of "Million Dollar Listing."...(Read More
 
April home sales fall 6.9% vs. expected 2.7%
5/23/2019 10:16 AM
(Please visit the site to view this media)CNBC's Diana Olick and Rick Santelli report on weaker than expected home sales for the month of April....(read more)
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Initial jobless claims less than expected showing strength in job market
5/23/2019 8:53 AM
(Please visit the site to view this media)CNBC's Rick Santelli, Steve Liesman and Michael Santoli join 'Squawk Box' to discuss the U.S. weekly jobless claims number and what it indicates for the U.S. economy....(Read More
 
Why this expert says there"s no threat from inflation despite Fed patience
5/23/2019 7:54 AM
(Please visit the site to view this media)Barbara Reinhard, head of asset allocation at Voya Investment Management, and CNBC's Mike Santoli join "Squawk Box" to discuss the affect of the latest announcement from the FOMC and how it may affect the markets.
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Fed minutes: No rate moves "for some time" even if the economy improves
5/22/2019 1:40 PM
(Please visit the site to view this media)CNBC's Steve Liesman reports on the Federal Reserve's meeting minutes....(read more)
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Here are some signs that high-end housing might be headed for trouble
5/22/2019 10:55 AM
(Please visit the site to view this media)The high end real-estate market is under pressure, with an oversupply of high-priced homes and falling sales. Among the hardest hit are homes built on speculation. CNBC's Robert Frank reports on one mansion builder in L.A. who is facing...Read More
 
Rate cut warranted if trade tensions escalate further, says strategist
5/22/2019 10:20 AM
(Please visit the site to view this media)Gabriela Santos, global markets strategist at J.P. Morgan Asset Management, and Brian Jacobsen, multi-asset strategist from Wells Fargo, join "Squawk on the Street" to take a look at the the Fed, trade and the broader markets.Read More
 
Here"s what to watch for from the Fed minutes
5/22/2019 9:44 AM
(Please visit the site to view this media)Investors will be keeping a close eye on the minutes from the Fed's last meeting, which ended on May 1st. CNBC's Steve Liesman joins "Squawk Box" with a preview....(Read More
 
Schnure: Real estate has offered a bit of a refuge for investors from the trade war
5/22/2019 8:15 AM
(Please visit the site to view this media)Calvin Schnure of NAREIT discusses the future of Fannie Mae and Freddie Mac, as well as investment opportunities within the real estate sector....(r...Read More