Weekly Market Update by Retirement Lifestyle Advocates

Small Businessowners Struggling

         Nearly half of all small business owners couldn’t make their rent payments in September, marking a three-year high.  (Source:  https://www.restaurantbusinessonline.com/operations/more-4-10-independent-restaurants-couldnt-pay-their-rent-september)

         According to Alignable’s September Rent and Revenue Report, 48% of small business renters could not make their rent payments in the month of September.  July and August saw 41% of small business renters fall short on their rent payments.

         The data is based on survey results from almost 3,500 small business renters.  Inflation was cited as the main reason, with 57% of survey respondents stating that their rent was higher than it was just six months ago, and 19% of the respondents reported that their rent had increased more than 20%.

The Social Security Administration Released 2023 Wage Statistics

         According to the report released by the Social Security Administration, 67.6% of US workers earned less than about $64,000 in calendar year 2023.

         The median wage of an American worker in 2023 was $43,222,81, meaning half of workers earned more than that number and half earned less.  (Source:  https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2023)

         The middle class is quickly evaporating.  Living the American dream is now out of reach for more workers than not.

The Average Age of a Homebuyer is Increasing

         The average age of a homebuyer in the United States just jumped to 56 years of age.  (Source:  https://www.msn.com/en-us/money/realestate/the-average-age-of-us-homebuyers-jumps-to-56-homes-are-wildly-unaffordable-for-young-people-real-estate-expert-says/ar-AA1ttK9f)

         As mortgage rates increase and more young buyers are priced out of the market, it’s not surprising that the average age of a homebuyer is dramatically increasing.

         The average age of a homebuyer in calendar year 2023 was 49 years of age.  Just one year later, the average homebuyer’s age has increased to 56.

         Homeownership costs have risen quickly.  The median price of a home in the United States now stands at $435,000.  That’s up 39% since 2020.  Over that same time frame, the interest rate on a 30-year mortgage has more than doubled.

Fed Cuts Rates Another .25%; Mortgage Rates Rise

         The Federal Reserve, the central bank of the United States, recently cut interest rates by another 25 basis points.  The additional rate cut comes on the heels of a 50 basis point cut in September.  (Source:  https://www.msn.com/en-us/money/other/fed-cuts-interest-rates-again-but-uncertainty-swirls-as-trump-policies-could-fuel-inflation/ar-AA1tGCLa)

         As the Federal Reserve is moving to cut interest rates, mortgage interest rates are continuing to increase.  Reuters reported last week that the average interest rate on a 30-year mortgage is now 6.79%.  (Source:  https://www.reuters.com/markets/us/us-30-year-fixed-rate-mortgage-rise-four-month-high-679-2024-11-07/)

More Office Building Owners Delinquent on Mortgages

         Wolf Richter reported that the delinquency rate of office building mortgages spiked to 9.4% in October.  (Source:  https://wolfstreet.com/2024/11/04/office-cmbs-delinquency-rate-spikes-to-9-4-highest-since-worst-months-after-the-financial-crisis/)

         That delinquency rate is up a full percentage point from September and is the highest since commercial real estate suffered a literal meltdown at the time of the financial crisis.  The delinquency rate has more than doubled since July of 2023.

         In 2020, the delinquency rate was less than 2%.

German Economy Crashing, Bankruptcies Soar

         Bankruptcies in the country of Germany are now at their highest level in more than twenty years.  (Source:  https://rmx.news/article/highest-number-of-bankruptcies-in-20-years-german-economic-crisis-is-crushing-companies/)

         In the month of October, 1,530 individuals and corporations filed for bankruptcy, an increase of 17% over September.  That data was reported by the Leibniz Institute for Economic Research Halle.

         A spokesman for the Institute noted that at least 1,000 companies per month had been filing for bankruptcy this year, but now the 1,500 level has been exceeded for the first time.

         Construction businesses were hit extra hard in the latest month’s bankruptcy filings.

         Volkswagen, the German auto manufacturer, recently announced plans to close three plants and lay off 30,000 workers.

Some Retailers Promoting an “Inflation-Free” Thanksgiving Dinner

         Aldi, the no-frills supermarket, is offering a low-cost Thanksgiving meal package with the cost coming in under $50 for a family of 10.  The package includes a Butterball turkey, spices, gravy, bread rolls, macaroni and cheese, stuffing, green bean casserole, cranberry sauce, mashed potatoes, sweet potato casserole, and pumpkin pie.  (Source:  https://money.com/thanksgiving-grocery-price-cuts-inflation/)

         Aldi is one of the fastest-growing supermarkets in the US, with 2,500 stores in 39 states.

         Walmart is also slashing prices on ingredients for a Thanksgiving dinner.  The company is offering an ‘inflation-free Thanksgiving’ meal of 29 items for around $56.

         This week’s RLA radio program features an interview that I did with the economic researcher Alasdair Macleod. The program is available now by clicking on the "Podcast" tab at the top of this page.

“A pack of jackasses led by a lion is superior to a pack of lions led by a jackass.”                                   -George Washington