New Cars Are More Affordable Than They’ve Been In Over Two Years

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New cars have suffered from an affordability crisis since the middle of the pandemic when a shortage of microchips and other issues caused prices to rise dramatically. While we’ve come down from the price peaks, higher interest rates have kept a major index of affordability stubbornly high for the last year. That index just fell off a damn cliff.

It’s time for a little good news around here at The Morning Dump, so I’m excited to lean on the vehicle affordability report that just came out this morning. I guess there’s good news if you’re a Stellantis shareholder as profits, earnings, et cetera remained fairly strong in 2023.

Do you want a big, fancy BYD SUV in Europe? There’s good news for you there as well as BYD is going to show a few new-to-Europe models at the Geneva Motor Show. And then, finally, uhh… good news if you want a Citroën in Russia because Russia has found a way around sanctions, maybe, to build them. Ok, it’s a mostly good news Morning Dump.

New Cars Are Way More Affordable

Cox Affordabilty Index
Source: Cox Automotive

This shouldn’t be a huge shock to anyone who regularly reads The Dump or this site in general (we were just talking about affordability a couple of weeks ago), but affordability is itself a curious concept. Just because the list price of an item is cheaper doesn’t make it more affordable if financing costs go up, or if wages go down.

That’s why I’m a fan of the Cox Automotive/Moody’s Analytics Vehicle Affordability Index, or CAMAVAI, or just the Affordability Index. The methodology behind this is pretty sound (you can read about it here if you wanna geek out) and boils down to looking at the actual transaction price for new light passenger vehicles (taking into account incentives), the amount people generally finance, interest rates, and how much money households are making. The index then shows the best guess for the number of median weeks of income a typical household would need to purchase a new vehicle.

Great news! The January affordability report is out and there was a huge, Wile E. Coyote-looking-down-off-a-cliff-ass drop.

There are a lot of good numbers here, with the average payment dropping by 3.2% and the median weeks of income needed to purchase the average new vehicle hitting 37.5 weeks, the lowest level since August 2021.

What’s contributing to this? Median income grew 0.3%, the KBB average new vehicle transaction price went down 2.6%, and the average new vehicle loan interest rate dropped slightly to 10.28%. All of those metrics are moving in the right direction for affordability.

“Just as new-vehicle affordability improved in January to its best level in over two years, access to auto credit moved in the other direction,” said Cox Automotive Chief Economist Jonathan Smoke. “Income growth continued while both the average new-vehicle price and the average interest rate declined making new vehicles more affordable. However, we saw credit access to auto credit decline to its lowest level since August 2020.”

Credit is sort of the outlier here, even with interest rates declining slightly there is a larger concern in the economy over credit and that could lead to the rate stalling out instead of continuing to improve.

Stellantis Has A Strong 2023 In Spite Of Product Mix

2025 Ram 1500 Rebel

Stellantis posted a record $20 billion of net profits in 2023, up from 11% in 2022. How did they do it? A lot of it was higher pricing.

From The Detroit News:

Upped price points particularly in foreign markets drove the earnings growth in the third year of the company that includes Chrysler, Dodge, Jeep and Ram as well as the likes of Alfa Romeo, Citroën, DS, Fiat, Opel, Peugeot and Maserati. Although the company trumpets a higher average transaction price of $53,300 than its competitors in the United States, production disruptions and costs associated with new labor agreements last year kept North America from seeing earnings growth. There also was a 1% decrease in U.S. sales last year, but Stellantis says it’ll remain “disciplined” on pricing.

Huh.

We sort of talked about this earlier this week. Stellantis, at least in the United States, doesn’t have a particularly compelling product portfolio outside of Jeep and, to a lesser extent, RAM. Keeping prices up is a strategy and Stellantis thinks it’ll keep to high margins on its products in 2024, but at some point you can only lose so much market share.

The ability of Stellantis to deliver new products, on time, across its brands is going to be key to getting through 2024 without losing ground.

BYD Is Bringing The Yangwang U8 To Geneva

Byd Yangwang U8 1

We talk a lot about Chinese automakers bringing cheaper cars to markets like Europe and Latin America, but many of these companies also build luxury cars that are, in theory, cheaper than rivals.

BYD will have some of these vehicles on display in their massive Geneva Motor Show display this week, including the moonwalking BYD Yangwang U8. From a company press release:

BYD will also be teasing public reaction at the 2024 Geneva Motor Show with the exciting European premiere of YANGWANG technology. YANGWANG is the supreme luxury sub-brand of BYD and represents the pinnacle of innovation in inspirational new energy vehicle technology. BYD provides a glimpse of the exceptional capabilities of YANGWANG technology during a sensational preview at the Geneva Motor Show.

The automaker will also have its currently available products like the ATTO 3 and Seal there, of course, next to its big Mercedes-targeting SUV. I’m curious as well what kind of reception the Yangwang gets.

Report: Russians Are Getting Around Sanctions To Build Citröens

C5 Aircross Suv 1600x780 2

In light of Russia’s brutal and illegal invasion of Ukraine, Stellantis joined most other automakers in walking away from Russia. So what are the Russians doing? Figuring out ways to build Citröens according to this exclusive Reuters report:

In December last year, Russian company Automotive Technologies imported at least 42 car kits for assembling the Citroёn C5 Aircross model at the Kaluga plant, which is still majority-owned by Stellantis, customs records drawn from a commercial trade data provider showed.

Manufactured in China, the kits were produced by China’s Dongfeng Motor Group the data showed.

Automotive Technologies was assembling the Citroёn C5 Aircross at the Kaluga factory, according to two employees at different Russian car dealerships. The sources spoke on condition of anonymity because the information is not public.

What’s curious is that Stellantis, which owns Citroën, has a partnership with Dongfeng, which is why Dongfeng has the ability to produce these kits.

This is tricky and it’s not clear if it’s actually a violation of the sanctions or not. Stellantis, for its part, has basically admitted it doesn’t have any control of its plant in Russia, but I’m not sure if that is true of its Chinese partnership.

What I’m Listening To While Writing TMD

Let’s get going today with a little Tame Impala. I love this song. I love the Rihanna cover as well. The whole album is great.

The Big Question

The economy, to some degree, isn’t just about numbers. It’s about vibes. If people have a lot of savings but are worried about the future they’re less likely to spend, which slows down the economy, which in turn leads to reductions in earnings, which leads to layoffs, which leads to a bad economy, thus proving the vibes correct. How are you feeling about the economy right now where you are?

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138 thoughts on “New Cars Are More Affordable Than They’ve Been In Over Two Years

  1. I feel lousy about the economy. I keep hearing about how resilient it is but my wife and I/other upper middle class folks we know are in a pretty shitty situation. The Fed’s little interest rate party has lowered the values of our assets significantly. Our house has depreciated since we bought it and both of our cars have taken a massive hit. Of course I didn’t expect them to appreciate, but the crazy interests rates have harmed the values a lot.

    Our retirement accounts took a big hit too. They’ve more or less bounced back to where they were before all the madness began, but all the recent ups and downs essentially kept them stagnant for a while. Our household income hasn’t grown fast enough to keep up with inflation either. We essentially went from doing pretty damn well/maybe being knocking on the door of being upper class to being firmly immobile where we currently are.

    I’ll acknowledge that we’re in a more privileged position than most, that we’re fortunate, and that we’re still saving every month and contributing to retirement, so it’s not like we’re roughing it out here. But we went from rapidly growing financially to more or less being a couple notches above stagnant through no fault of our own. And now with a baby on the way we’re having pretty serious discussions about considering career changes in the next few years to keep up with how goddamn expensive everything is…and we’re two licensed healthcare providers with master’s degrees.

    It’s pretty frustrating and we have a lot of peers who are in similar situations that are also frustrated. Whenever I see headlines about how well the economy has been doing all things considered I’m uncertain as to where the money is going, because we certainly aren’t in a better place than we were a year or two ago. And given how hard we work it’s definitely been a bit of a wake up call.

    Something will have to give eventually, and it’ll either be a career change or two, relocating, or some combination of the two. It looks like we’re basically going to be stuck where we are right now forever if we don’t make changes, and that’s not a happy place to be.

    1. You’re just not rich enough. You gotta work harder.

      Just kidding. Just think about this one thing, you are in your own home, and can afford the mortgage. Post 2020, something like half of all Americans will likely NEVER be in that position.

      Capitalism is working exactly as intended – the wealth gap is ever widening, the rich white people at the top are getting richer and richer. Pain at the lower levels is a feature, not a bug.

    2. Same. The wife and I have realized some decent wage growth over the last few years, but our buying power is about where it was before. We were also fortunate enough to by our first home a few years ago, but now we feel rate locked into it which wasn’t part of the plan LOL.

      1. That too. We’ll likely never see anything close to the interest rate we have right now ever again. We’d planned on our house essentially being a starter/5 year type of deal before an inevitable move into the burbs for the serenity/better schools/etc.

        But now? That’s looking unlikely. We can’t afford the nice burbs anymore with the interest rate bonanza, not to mention property values there are going up because the city (like many cities lately) has been such a shit show. We also planned on having a nice chunk of equity which we’re not building like we’d planned for because the aforementioned interest rate bonanza has taken a dump on our home’s value.

        And this is in freaking DC, where property values are never truly low ever. I can’t even imagine how rough it’s been for folks in similar situations in other places. I’d imagine a lot of people are probably six figures underwater right now solely because of the Fed.

        And it’s frustrating! I’m not sure why people like us need to hold the bag in the name of Line Going Up/The Greater Good/etc. We did literally everything by the books/bootstrapped the shit out of our careers and are financially stagnant because the 1% and a bunch of old dudes in DC who answer to them need us to write the checks for some reason.

        1. Not to suggest I know more about your house than you do, but… What makes you think the value has dropped so much? My own (admittedly suburban/exurban) house, fortuitously bought in 2019, went up by nearly 40%, and has declined less than 2% from that peak. Granted this is based on Zillow’s somewhat dubious algorithm, but it’s all based on recent transactions of comparable (on paper, anyway) properties and you’re the first person I’ve encountered with this story. The usual line is “the rates are up and values haven’t moved AT ALL! How am I ever supposed to save up a $125,000 down payment?”

    3. Dude, if you are upper middle class than you are by definition doing well. I understand feeling the pain of inflation and interest rates, but come on. Unless you’re nearing retirement, current impacts to your retirement accounts are meaningless.

      1. People need to quit going to Starbucks, buying crap at the gas station and wasting money on tattoos, tobacco and vaping. And get your lady to lay off the mani-pedis and expensive handbags, shoes, cosmetics and hairdos. All of a sudden there’s plenty of disposable income available.

    4. The government telling me, quarter after quarter, that the economy is doing great leaves me asking, “For whom?”

      Don’t gaslight us, we know how it really is here in the trenches. And don’t tell us our sucking chest wound is no big deal, just put some dirt on it.

    5. I agree w/ most of your comments, but this one is way entitled. It sounds like somebody that has never actually “struggled” financially. There are plenty of people that work just as hard as you that have nowhere near what you have.

      “We’re basically going to be stuck where we are right now forever if we don’t make changes, and that’s not a happy place to be.” Really?! You own a home, have two cars, money in retirement, are UPPER-MIDDLE CLASS and that’s not a happy place to be??? Dude, be grateful as you’re in a position BILLIONS of people would love to be in.

  2. Cars won’t be affordable to me until the Prius goes for MSRP. Everytime they make something remotely desirable it gets dealer adjusted, and you’re left with things like the crown going for cheaper than the Prius

    1. Find a better dealer. Consider going out of state. I’m in CA and my local Toyota dealer has a policy to not add ADM. I don’t know how long the wait list for a Prius is though and a new Tacoma with the off-road goodies that I want is still over 50k so affordable and attainable will stay a relative measure.

  3. Yangwang and Dongfeng . . . if Chinese cars are sold in the US with their Chinese brand names, they’ll be a goldmine for burgeoning middle school comedians. And myself in my 40s.

    1. It might be kind of a niche thing to be worried about, but these are too close too the shady sellers on Amazon that use alphabet soup companies to shill impossibly cheap crap. Tell me that Dongfeng makes monitor mount arms for desks or Yangwang makes RGB STRIP LIGHT HIGH BRIGHTNESS SOLID/PULSE/STROBE 16FT(5M) WITH REMOTE FOR CONTROL and I’ll believe you.

      1. I’ve been wondering for years if there was a random word generator they used for the endless “brand” names used for the exact same products. Now it would be AI, but they’ve been doing that for years.

  4. Ohhhh ok so when BYD wants to show off their Yangwang its a “sensational preview” but when I do it it’s “indecent” and “eww what are you doing stop that”

  5. Remember when inflation was high, and then super high, but those with two feet still on the ground had to do the legwork of disentangling the ludicrous housing and new/used car pricing data to try to get an idea of what was really happening to currency value?

    We’re about to do that again, but now it’s going to be the other way. This correction is going to drive inflation to at or below target, and the Fed is going to see right through it and hold the line on rates while people absolutely scream blood murder. Happy election season, everyone.

  6. Here in Idaho, we have a really weird economy right now, particularly in housing. We have a lot of housing around here being bought up as rentals. Those rentals are being put up at what feels like exorbitant rates. But the rental property sales are driving up mortgages for those who want to buy a home, so there are higher numbers of renters. Combine that with a significant gap between low wage earners (we are at federal minimum and a lower wage for tipped employees) and high wage earners (we have some tech companies and good pay for utilities employees) and you see a lot of people in a really tough place, along with a lot of people in a really good place.

    We also have a suburb that has one of the highest concentrations of California public pensioners in the country, which is a lot of money that goes into that community, but it doesn’t seem to push wages up, just real estate values and prices.

    I’m doing alright, but I see people doing much worse than a few years ago, and some doing much better (mostly those who had real estate, but no savings). We’re looking at a situation where we’re seeing businesses struggle to find employees because minimum wage is not enough to survive and commercial real estate eats up a lot of the budget.

    We’re also driving out some of our healthcare workers and such, but I don’t know what effect that has on the economy. Can’t be great, though.

    Idaho is a real mixed bag in a lot of ways, economy included.

    1. That is a massive issue anywhere there is coastal money! I make double the median income in my area and I cannot afford a house. Many of my coworkers who make approximately the same amount live with their parents and the ONLY (young-ish) ones who have houses are married couples with dual income.

      1. Yup, we’re fucked in MA and RI too. Most areas aren’t even that nice, but inventory is just SO low, and people of means found they liked being near the ocean during Covid. In my town in RI, 64% of real estate transaction in 2023 were out of staters purchasing property.

    2. I remember reading about Ketchum, ID a year or two ago, where nurses and whatnot were living in tents in the woods because local housing had gotten so ridiculous. Many people had or were in the process of losing housing because of short term rentals, and the inventory problem had existed pre-2020 because local wealthy population had fought tooth and nail against any development.

      It’s funny, one would think ID would be a fairly low COL state, but apparently not. I suppose like most other places where people actually WANT to live, it’s great if you’re wealthy, but if you’re just working your jobby-job trying to live a modest life, you’re screwed.

      1. When I came to Idaho, it had a low COL. I’m not 100% sure when/why/how it changed, but the resort towns were definitely wrecked by AirBnB et al. When almost all the homes went short-term rental, they ran out of places for the people who actually live and work there.

        I think a lot of it also happened when conservatives decided to flock to conservative states (Texas led the charge, but Idaho has really pulled in a lot of them). They came in with money from selling homes in other states and bought here in cash or at least large down payments, and a lot of them fight any attempt to put in so much as a duplex anywhere near them (because they came here to get away from denser housing), so you get full-price (or more) purchases driving up the price and not enough supply increase for the added population.

    3. The Vacationland Curse!

      This has been a thing in Maine since the wealthy families of New York wouldn’t let the wealthy families of Boston/ Connecticut hang out with them in Hamptons/Newport anymore. In search of summer colonies of their own, significant wealth hit the Downeast trade winds. Buying up any piece of land within 100 yards of the sea. Which worked out great for guy who got to sell his oceanfront property 150 years ago. For the rest of us, they created isolated communities in remote locations. Often with little to no interactions with nearby community outside of periodic needs for the help. They then create their own business to cater to their seasonal needs, often owned by them. All the money made in Boston, moved to Maine to be exchanged another person from Boston. And some dude from Maine gets to watch while cleaning the pool. It will never trickle down. The price of property becomes completely detached from the year round residents, and half the homes in town will sit vacant 9 months out of the year.

  7. the company trumpets a higher average transaction price of $53,300 than its competitors in the United States

    This explains everything about why Stellantis is struggling… when the company has the perception of building shit quality cars.

    I didn’t say that right, but you get it.

    

  8. The way the numbers are tabulated today cannot be directly compared to the numbers of the past(pre 1990s), because the methodology with which they are taken is not the same and has had the consistent habit of making things appear better than they actually are vs the old standards.

    1. Honestly wondering: What makes you say that? What information have you read that has come to that conclusion?

      Obviously the fun part about polls and statistics is that, if you’re a bit clever, you can make the data say whatever you want it to. I’m just wondering where the shift was to change how the info gets reported, and why.

      1. CPI and inflation doesn’t account for shrinkflation which is why the govt doesn’t have any idea or clue on reality and made a pathetic attempt to rattle the public with a SB ad.

        1. It’s supposed to. They go out and physically look at items in the store to ensure that it is an apples-to-apples comparison. At least in Canada, they do.

  9. A light hearted, brief statement of my view on the economy is that while my income is increasing and my situation improving (I feel terrible for those who’s situation isn’t) the things I can buy in the automotive world are not improving to my satisfaction. I’m exploring the two wheeled segment.

    1. Sums it up for me perfectly. Wanted to get a new car, but there is nothing I am interested in for the prices they are asking. Apparently, no one makes the types of vehicles I want anymore. So, 2 wheels is what I am looking at.

    2. If you live within 10 miles of your work place in a reasonable (non-freezing) climate, two wheeled transport is a realistic option. For those in a less generous environment, four wheels are obviously more realistic.

    3. +1. I’m laid off now, but even last year when I was paid pretty well, a car payment (okay, a Blackwing car payment) just seemed insane. Saving up $70k for no payments is even more insane. But the realistic middle, saving up a healthy down payment but still ending up with a payment that’s still dancing around my mortgage seemed least sane of all.

      I don’t regret getting back on a motorcycle one bit. I think it’s been really good for me actually.

    4. Economically, I’m basically in the same position. And I feel the same way about what cars are available, new anyway. I bought two cars last year and both were used, not because I can’t afford a new car, but because none of the new cars were interesting enough.

  10. Honestly I think most people are past the ‘saving for bad times’ time. Savings are ridiculously low, to the point that there is no floating, you either swim or you sink.

    That’s why I think the economy looks good in traditional metrics, because people are spending like there is no tomorrow because there is no tomorrow. Another commenter replied to me a while back with ‘spending is at an all time high and that’s good’ and my point there and now is ‘someone with a terminal illness has spending at an all time high, that doesn’t mean their long term outlook is great’.

    Also as far as the Russia Citroen story is concerned: DON’T DO BUSINESS WITH CHINA, THIS IS WHAT YOU GET FOR DOING BUSINESS WITH CHINA!

    1. “Bad times” is just becoming the default in the US.

      I think “doom spending” is a very real thing. I’ve been saving as much as I can, theoretically to buy a house, but realistically, at the rate I can save that’s not going to happen. Meanwhile my GF is of the opinion “I was born poor, I’ll die poor. I might as well enjoy what I have while I can”.

      My 69 year old father is in assisted living with dementia, so I’m starting to come around to her line of thinking. At 45, I might only have 20 years left of having my marbles.

      1. This comment of yours is as good as any about this, but buying a house doesn’t necessarily need to be a major goal. Unless you are planning to make it your forever home, it’s pretty hard to make more money on it than you would if you invested in something like an Index fund. Houses are not cheap to maintain with all the ancillary stuff like insurance/taxes/maintenance etc. I don’t want to own a home. Never have and probably never will. It doesn’t make sense for me.

        1. Good point, and I’ve seen many experts say the same thing. After taxes, maint, etc., it’s a money pit. I really just want my own space, a garage and driveway to wrench in, and my own yard in which to fit more dogs. My dog needs a dog, but I can realistically only have 1 in my living situation. I’m fortunate my landlord allows even that.

          A 2-bed ranch, with even a 1 stall garage, maybe out in the sticks with an acre or two (I’ve always wanted room to justify a dirt bike or atv) would be perfect, and prob would be my forever home.

        1. Also photography. I dunno how unique their modern stuff is but a lot of their earlier stuff was made from intellectual property war reparations from Germany.

  11. How do I feel about the economy?

    I’ve riding out the economy just fine but I know a lot aren’t so lucky. Seeing the actions (or lack thereof) of the government over the last year or so has really disenfranchised me towards this nation and our economy.

    We have a bunch of 80 year olds with ancient ideas on how to fix it. Let’s bring in someone younger folks with new ideas. I always found it odd that the US would want to fix inflation by causing a recession. In the US! One of the worst “first world” countries to be unemployed in.

    1. The new “American dream” is to leave.

      I recently heard the CEO of Blackwater say the US needs to take over countries that are unable to govern to the benefit of their citizens. Ok, so who’s going to take over the US?? Cleary the US government has very little regard for 99% of its citizens.

      1. The CEO’s comments are on-brand for a company that is pretty much as evil as you can get.

        I can certainly say that my “American Dream” is to move to Europe and never come back. So you’re not wrong there.

  12. Stellantis failed to learn the Nissan lesson. You can cost reduce your way to record profits… for a while. Then your products and technology are all old and its a tough road back.

  13. They probably don’t have any control over their Chinese operations, given what we know about joint ventures, state-owned shit, etc.

    Also, time to bring back the cheaper cars.

      1. Please excuse my ignorance here.
        Is your comment based on your own real life or sarcasm?
        Would like to know. Thanks.

        I live in one of the historically 5 cheapest states to exist in. And over the last 5 years it has become clear that am probably gonna die here, and be stuck in the same Shitbox home we bought in 2007 due to inflation in housing costs, mortgage rates, insurance costs.

        Throw in the inflation in food, medical costs, clothing, and everything else. It has become a litter box full of overpriced stuff here, and wages have not come even close to keeping pace.

        During the early covid days here wages went up to almost poverty levels. But soon enough shit returned to it’s historical level, which means the same companies are now offering new hires pay that is what was being offered in 2015 to 2019.

        In effect most here are living at a level below what we had prior to covid when it is measured in actual buying power.

  14. How are you feeling about the economy right now where you are?

    SW Florida here. The economy is… weird. But it’s always been weird here. Naples is a very wealthy area with a large number of seasonal residents. That part of the economy doesn’t feel the pain that a lot of middle and working class people do from inflation in all its forms.

    The housing market here is brutal. 1-bedroom apartment for $2500/month brutal. Being largely centered around the service industry, it is difficult to attract people to the area when housing can easily eat up 50% or more of a decent paycheck. It’s become nearly impossible for my business to find local talent. We import housekeepers from Jamaica and front office personnel from the Philippines and house them on site. Some lip service is paid to workforce and low-income housing but there really isn’t any mechanism here in the “Free State of Florida” to incentivize it.

    I’m a hotel manager on the finance side. I do reasonably well, and am fortunate to have bought my house 23 years ago before prices went insane. Even so, I’ve seen my homeowner’s insurance bills double, car insurance double in the last five years, as well as the increase in grocery prices, etc. I’m keeping my head well above water but a lot of people who aren’t well-established aren’t.

    Anger over the economy is real and absolutely warranted. Unfortunately it tends to be directed toward the people who are doing the most to try to help while the companies and politicians who create these conditions in the first place tend to slip under the radar.

    1. Don’t forget to include that housing inventory is up around 70% in Naples b/c people can’t afford the insurance anymore and the hopes of falling rates is dimmer. People are starting to say “fuck it” and get outta dodge.

        1. Bingo. In that same report it stated that the Ft. Myers are is somewhere around 110% and the only option there is Citizens Insurance, which isn’t good at all. I don’t need to tell you that, though. ugh

        1. Yeah, this is my elderly aunt and uncle’s dilemma. They moved down to Naples from NH years ago, getting a lot of house cheap, but now that they’re not doing well health-wise, find the weather has gotten too hot, and a lot of their friends are gone, they want to move back and can’t afford to.

    2. My parents in Florida asked if I had any interest in the house I grew up in and I said “why would I want property in a place that is actively being reclaimed by the ocean.”

    3. Feels similar here in Central Ohio. Being the seat of government for the state, having THE™ Ohio State University (along with numerous other universities and colleges), the influx of tech companies (Meta, Amazon, Google, and Microsoft are among those setting up data centers, and Intel is investing more money into their campus than the rest of that county was worth before hand), Honda setting up to have a battery plant to feed the Marysville plant when the switch to assembling BEVs is here, and on and on…

      The economy here feels good. However, there’s still parts of the state that are seeing shrink, and some cities that aren’t growing to their potential. I built a house almost 7 years ago, and have seen the value go up by 50% (though that’s been holding steady with the rate increases over the past year). I’m expecting it to keep moving that way as Intel and the rest keep building out over the next few years. I doubt I’d be able to afford buying my house right now, and I can fairly confidently say I wouldn’t want to afford it. If I was trying to break into the market today instead, it would feel much different.

    4. Tampa, FL here, it’s the market here is absolutely ridiculous. It’s one of the top 10 markets in the nation and absolutely overpriced. We’re getting a lot of people working remotely from states like CA and NY and they’re just absolutely outpricing the locals. The hospitality jobs don’t pay that well and I have no idea how people survive. I bought my house in 2013 but my insurance has more than doubled. I don’t live close to the water, I’m in the highest part of the city, and on top of that, my home is elevated. I’m very lucky but it’s infuriating that people who work hard here and love the area are unable to afford to live here.

  15. I’ve been needing a new car for the last few months since my previous DD was wrecked by an inattentive driver. I’ve been driving my truck and hate putting the miles on it so I was looking for something “fun” to drive. Really wanted a GR Corolla, but the local stealerships act like they are too good to even discuss cars if you aren’t frothing at the mouth to buy a truck, and interest rates are still too damned high.
    So, I did the right thing and bought a nearly 60 year old “economy” car that needs minor work and should be easy to operate until rates come down or I just stop caring about needing a new car.

      1. Haha! I have Beetles, but wanted something a little different this time around and my current inventory had few DD candidates in it. A buddy offered a sweet ’65 Falcon sedan that had been sitting in a shed for the last few decades. All original and complete but the mice had a friggin’ field day in it. All of the interior is toast and it’s now gutted. Getting the smell out is current order of the day, but this should be a solid driver. I had been looking at a ’63 Corvair though too so I bet that’s a fun one!

          1. This is the worst I’ve seen in a car I bought from storage. They were in EVERYTHING. Wish I could attach pics because it’s next level. Headliner, ductwork, seats, behind the dash. Even ate the visors after they built nests in the headliner above them, broke through, and then ate the padding out. I gutted it and am currently bleaching the hell out of everything. I’ll win the battle though!

  16. I was laid off last week from a company in an industry that’s been struggling and has seen multiple companies withdraw in the past year. My view of the economy is rooted in my current job search. The positions I’m applying for pay 20% to 30% higher than I was making, with more flexible conditions. It’s early days, but I’m super optimistic even after getting laid off.

  17. As usual I expect doom and gloom in the comments, but even if I *personally* have experienced better times, I feel confident saying this is objectively the best economy for the widest swathe of people in my adult life.

    Stock market – record high

    Unemployment – steady at record lows

    Inequality – decreasing steadily since the pandemic

    Wages – rising faster than inflation for 2 years now, and fastest for lower income workers

    Inflation – nearly back to 2% target

    Housing prices – high (remember the majority of people are homeowners, yes it’s tougher for first time buyers, but many more people have gained equity vs struggling to buy)

    No bubbles, supply shocks, oil crisis, or anything on the horizon.

    Obviously no economy is perfect, there are always people struggling, and I don’t wish to minimize that. But overall, for most people, things are looking good.

    1. Sorry if I am responding to you too much today (lol), but you’ve posted this type of statement before and while some of it is correct, a few things can objectively not as rosy as you say.

      Unemplyment- Not always a great indicator as everyone knows it doesn’t include those not seeking work. Also, with low unemplyment, it also means (to the Fed, anyway) that there is less reason to lower rates.

      Wages- That’s all fine and dandy that more people are making $17/hour, but can they live off of $450/week net? Particularly when cost of goods has risen so much and is irreversible.

      Inflation- 3.1% is not close to “nearly” 2%. In fact, it’s practically flight to Australia in coach close to 2%.

      There are other things to point out, but I’m not gonna write a novel here.

      1. -Prime age labor force participation rates are also very high. There is no epidemic of people sitting at home not searching for work.

        https://fred.stlouisfed.org/series/LNS11300060

        -On wages, I have never said everything is perfect, but real wages are at multi-decade highs. So if affordability is a problem, it has always been one.

        https://fred.stlouisfed.org/series/LES1252881600Q

        -3.1% is a lot closer to 2% than 8.X was. The trend is clearly downward, and the goal is in sight.

      2. I usually try and avoid the political discussions but I do want to play devil’s advocate to your points about lower wage earners still not being able to afford costs of living;

        In general there is going to be a strong correlation to increased wages at the bottom tiers of wage earners and inflation. We all like to think that employers are extra-wealthy and can afford to pay more and will just eat the extra cost of higher wages. This is almost never true and always leads to higher prices and inflation.

        Realistically those at the lower tiers see buying power pretty much the same no matter how high it goes due to this affect. And in the mid terms they see lower buying power if rates go up like they are now.

        So anytime I see conversations about raising the minimum wage I tend to think that there must be an election near since it is mostly pandering for votes instead of a real policy discussion. Of course these days the causes of inflation are much more numerous and all workers at every level have seen increases to keep up somewhat with rising costs. This has not helped the inflation problem though but probably has a positive impact in views of the economy and is part of the reason we avoided a recession.

        Ok that’s enough I think

        1. Fair. I wouldn’t even say that it’s a “Devil’s Advocate” post. We are both basically saying that things aren’t that great, just not as shitty as it could be.

          This is not a rational reason to be bullish or even satisfied with it.

      3. Wages: I make 30/hr, which I would have thought of as AMAZING when I was a kid.

        Now though, it seems like nothing. Add the average car payment to my living expenses (gas, food, rent, etc), I’d be right back to paycheck to paycheck living.

    2. Agreed (in general), except I’d like to point out one small thing. While current inflation is near target it doesn’t make up for the cumulative inflation over the last 2 years that still happened. And while wages grew that still doesn’t make up for the lost buying power for any money people had saved up. So, I think people still feel a lot of pressure from inflation. This will subside as current earnings become a greater proportion of people’s savings. But people are still struggling to afford large purchases that require use of saved money. Even if the day-to day expense inflation is offset by wage increases.

      Also, as an aside, it seems like a large portion of people believe whatever idiot politicians tell them. So we end up with large portions of people believing the economy sucks even though objectively they are doing really well.

      1. Also, as an aside, it seems like a large portion of people believe whatever idiot politicians tell them. So we end up with large portions of people believing the economy sucks even though objectively they are doing really well.

        This is a serious problem that has become much worse since 2020.

        1. It seems we are in a unique position since 2020 in that both republicans and democrats are downplaying good economic news and amplifying bad news. In the past, the party in power focused on what was going well to stay in power. The democratic party messaging at this time seems to be “your life sucks so keep us in power and we will fix it if the republicans don’t stop us.” Maybe I am wrong, but I don’t recall a time in the past when both parties simultaneous thought it politically expedient to highlight only negative things about the economy.

          1. Huh? I thought Bidenomics is the salve that we were all healing with. At least that’s what they say in the press briefings every day…

            1. Realistically, there is no unified democratic party at this point. Biden’s team is saying a lot of positive things, but it seems like the majority (or at least a very vocal minority that gets a lot of attention) of democrats has adopted the “your life sucks” strategy. Say what you will about the republican platform, but at least they have generally consistent messaging within the party.

              I miss the days when politics was boring and something I could ignore.

      2. the lost value of my savings is a great point. I’m still mathematically in a good position personally, but the retirement accounts haven’t risen as fast as new wages since 2020, so I feel like I’ve fallen behind in relative terms. Relocating for a promotion and moving from a 2.9% mortgage to a 6.5% one didn’t help either.

    3. Yeah that sums it up pretty well.

      Cost of living is still a problem, but we are starting to see policy changes to tackle the issue.

      Political predictions are a crapshoot in general, but if there is one fairly reliable constant; widespread dissatisfaction amongst the populace tends to correlate with political change, which can be exploited in a variety of ways.

      People need to look around them and decide for themselves if the economy is going to the dogs, or if that’s just what someone wants them to believe.

      Personally? My partner and I started our own business last year, and we are constantly turning away work. Lots of folks out there with money to burn, looking for someone to help them do it.

    4. Unemployment is a BS metric. Whether you’re working 3 jobs and barely scraping by or working 1 job they’re treated the same, and if you haven’t looked for a job in 2 weeks you’re not included in the tally. I think unemployment is so low because people don’t have any savings to tide them over while they look for better work.

      1. Multiple job-holders are ~5% of all workers, in line with what it’s been for decades.

        https://fred.stlouisfed.org/series/LNS12026620

        As I posted in my first reply, prime-age labor participation is near record highs. There is no one sitting home not looking for work.

        The savings account balances of average Americans are not appreciably different than they have been for years (apart from pandemic outliers). Again, my point is not that everything is perfect, but that if we aren’t living in a good economy now, there hasn’t been a good one in the US in decades if ever. Which really kind of cheapens the term.

        https://fred.stlouisfed.org/series/PMSAVE

  18. As far as automotive vibes – they are building a light rail near my home and job and MN is about to fire up an ebike rebate program. I am hoping I can limp along my current vehicle for (05 grand cherokee) 1000-1500miles a year for cold winter day commutes and ride the train/ebike for the rest of my commuting. I really dislike sitting at the wheel in stop and go traffic on a freeway.

    1. This is the way. I take my ebike on the train 50% of the time. I have a neck pillow and noise cancelling headphones and sleep through my commute. If the light rail agency extends service as planned that will be 100% of the time.

  19. They took too much value from Jeep and it’s going to bite them in the ass.

    They need a ford maverick positioned renegade replacement and they need it fast.

    Wrangler rubicon profit margins won’t be enough.

    1. It’s interesting. The Maverick is obviously a hit, but I haven’t seen anything from GM or RAM indicating that they want to play in that market. I wonder why not?

      1. The same reason Ford doesn’t build enough to meet demand. It eats into the larger more profitable Ranger and F Series. Sorry, we don’t have any Mavericks, but I can show you this lovely F-250 Super Duper Duty Platinum Eddie Bauer Super Crew. Let’s go into my office and work some numbers.

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