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:
Tax audits: How long do they take, and what are the odds of getting one?
7/10/2020 1:56 PM
(Please visit the site to view this media)CNBC's Sharon Epperson breaks down how likely audits are for American taxpayers, and what happens when one does show up in your mail. Tax Day has been moved to July 15 because of the coronavirus pandemic.....Read More
Trump says he"s not "even thinking" about a "Phase 2" trade deal with China
7/10/2020 12:20 PM
(Please visit the site to view this media)CNBC's Ylan Mui reports on the latest comments from President Donald Trump about trade talks with China....(read more)
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Sen. Capito on what to expect from the next coronavirus stimulus bill
7/10/2020 9:42 AM
(Please visit the site to view this media)Senator Shelley Moore Capito (R—W.Va.) joins "Squawk Box" to discuss what might be coming in the next coronavirus stimulus bill....(read m...Read More
US producer price index dropped 0.2% in June, vs 0.4% increase expected
7/10/2020 7:52 AM
(Please visit the site to view this media)CNBC's Rick Santelli reports on the latest economic data including June's producer price index....(read more)
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Covid-19 mortgage bailouts drop by 435,000 but extensions increase
7/10/2020 7:22 AM
(Please visit the site to view this media)The number of homeowners in government and private sector mortgage bailout plans declined for the second straight week, as borrowers who got in earliest saw their plans expire. CNBC's Diana Olick reports.....Read More
Evictions could hit crisis level—Here"s how it"s impacting real estate trends
7/9/2020 1:17 PM
(Please visit the site to view this media)CNBC's Kelly Evans breaks down the threat of evictions amid coronavirus and trends in the housing sector with CNBC's Diana Olick and Ryan Schneider, CEO of Realogy....(Read More
Mnuchin: We support another round of economic payments
7/9/2020 12:00 PM
(Please visit the site to view this media)Treasury Secretary Steven Mnuchin said Congress and the White House will aim to craft another coronavirus relief bill before the end of the month. He said the White House backs direct payments to individuals, but did not specify what kind o...Read More
Treasury Secretary Steven Mnuchin on extending PPP loans and enhanced employment programs
7/9/2020 9:42 AM
(Please visit the site to view this media)Treasury Secretary Steven Mnuchin, joins "Squawk on the Street" to talk about PPP loans and enchanced employment programs....(read moreRead More
Allianz"s El-Erian on unemployment data, earnings outlook and tech stock valuations
7/9/2020 9:41 AM
(Please visit the site to view this media)Mohamed El-Erian, chief economic advisor at Allianz, joins "Squawk Box" with his initial reaction to the latest jobless claims data as well as what he's seeing in the markets ahead of a new earnings season.
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Jobless claims total 1.314 million for week ending July 4, vs 1.39 million expected
7/9/2020 8:31 AM
(Please visit the site to view this media)CNBC's Rick Santelli reports the latest weekly jobless claims data. First-time claims for state unemployment benefits were expected to total 1.39 million for week ending July 4, according to economists surveyed by Dow Jones.
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