?? Rates: can you take me higher?!

Welcome to?HomeSweet??- where homeowners get their news! We'll give you the tools, resources, insights, and memes to both build wealth and build a better life at home.

In today’s newsletter, we'll cover higher rates, rent demand, beautiful solar lights, what a $2.5k mortgage payment gets you today, where to eye deals in 2023, and how invest in real estate during a downturn. Let's go!?

If you like the newsletter, it would mean a lot if you spread the word and tell your friends about it!

?The Blueprint????

• ?Front Porch News:?Mortgage rates keep chugging upward. Apartment demand fell but don't get excited.
• ?Weekend Warrior:?Solar lit.
• ?Shower Thought:?Where we were 18 months ago and where are we going.
• ?The Toolshed:?How to invest in a recession.
• ?Meme Menu:?Dave "Money" Ramsey...

?Front Porch News?

Up up up: mortgage rates claw even higher?(MND,?Reuters).?It appears that Murphy's Law is firmly at play, as we watch mortgage rates cross north of 7% late last week. As a refresher, we've seem?rates climb from <3.00% to >7.00% in under a year. This is the?highest since 2001. Also: investment in residential construction declined?1%, residential spending?is down, and fed gov construction spending?plunged 6.6%. Just giving it to you straight, folks!?

• Chloe?Says: Good news is reserved almost exclusively for cash buyers who are waiting around for motivated sellers (selling between now and April, most likely). Sadly, there will likely be many such cases, given high mortgage payments may force some laid-off homeowners to sell. As for everyone else:?prices should come down before rates do. Of course, buying at the directionally correct time is still a real time data-driven event (translation: it's hard).?One can never buy at the real bottom nor sell at the real top. Do not kid yourself. Layoffs in a downturn typically occur between October and March, so plan accordingly.?
• Chloe?Action: For 99% of readers out there, try your best to?postpone buying a home until at least Q1?(and very likely after that). If you bought or refinanced a home between the beginning of the pandemic and end of 2021, congrats (from a rate perspective at least!).

Apartment demand in Q3... actually fell?(CNBC).?Historically, the summer is the busiest for apartment rentals. This past quarter saw demand unexpectedly dropp 1%, the first time in 30 years (when the metric started being tracked).?“Peak rent growth is clearly in the rearview mirror,” said Carl Whitaker, senior director of research at RealPage.?

• Chloe?Says: We are not encouraged by this headline, as we view it to mean that layoffs have begun, kids are moving back in with their parents (leaving expensive cities like NYC, SF, and Miami), and not enough profits were taken in 2021 when exuberance/greed were high. A story as old as time. And as long as home prices do not come down significantly,?those would-be homebuyers will continue to rent, which keeps rents flat (best case) or pushes rents higher (worst case). Mainstream normie media will try to keep chins up, but the preponderance of data says otherwise.
• Chloe?Action: If you are still renting, now is the time to minimize unnecessary spending. If you find a cheaper but just-as-safe neighborhood in your city, considering renting there. Unless you are truly financially independent ($2 million in assets or more), do not spend like you're already at that level.?Cash is king?and rent is 20-50% of your income. Reach out with any questions here, guys and girls :)

?Weekend Warrior??

We got another inexpensive project you can knock out in a couple hours:

• Install solar lights in your outdoor space.?This is a great beginner project that adds cozy ambience and a sense of safety to your exterior. The lights require no wiring and no electricity, plus they come in a variety of sizes, styles, brightness, and colors of light. They perfectly punctuate a yard, sidewalk, driveway, flower bed, or the trunk of a tree. More information can be found?here.

?Shower Thought??

This is what we're looking at, gang: for a $2,500/month payment and 20% down, one can afford a $475k house today; in early 2021, that figure was $760k (a 37% dip).?

Bonus: the first markets to go down in price likely will be Texas, Florida, Las Vegas, North Carolina, SF and LA, Atlanta and Nashville (think early to mid 2023).?Any person that bought their first house in the last 14 years has NEVER seen a bear market, period. Lastly, new homeowners (naively) buy a house based on monthly payments, not base prices;?better to buy a house at a lower price than a lower rate, because you can always refinance your rate. Super low rate?usually?means one bought at the top (08/09 being a recent exception to this rule, when rates and prices together were at record lows). Don't forget this, fam.

?The Toolshed?

Three things we found this week that will make your life better as a homeowner:?

• Centriq?is the all-in-one home management app. Need the manual of some appliance/tool/electronic? General maintenance? Troubleshooting? Just snap a photo of the item, and they'll send whatever you need. Easier than scrolling TikTok.
• Nextdoor?makes it easy to get the most out of your neighborhood. It's where you and your neighbors can exchange recs, access local news, and give back to the community.
• Neighbor?helps homeowners earn an extra $100-$400/month by renting out their garage. Click?here.?
• Belong?helps homeowners rent their home or individual rooms.?Click?here.
• Here are the?best ways to finance?a short-term rental investment.
• And?11 ways?to invest during a housing correction.

?Meme Menu?

?Thanks for coming through. See you next week!?

If you want more, be sure to follow our Twitter?(@JoinChloe).?

Eyal,?Ben, and?Aaron??

More Genius Here

?Last thing before you go... what's?Chloe??

Chloe?is a ???backed by your???. Click?here?to learn more and join our waitlist!?

DISCLAIMER:?None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.?