Happy birthday Fats Domino who was born on this day in 1928. This little-known musician is considered a pioneer of rock and roll music and started playing bars in New Orleans at the age of 10.
Domino’s single “Fat Man” was the first rock and roll record to sell more than 1,000,000 copies in the US.
Home prices in Portland
Speaking of one million, how long will it take for an average home in Portland to be worth $1,000,000?
According to today’s Case-Shiller Home Price index report home prices increased by 3.9% during 2018. For a median priced home in Portland ($423,000) that appreciates by 3.9% it will take 23 years for the home to be worth $1,000,000 (2042).
According to the FHFA Home Price Index report, which only tracks home prices for homes with conforming (non-jumbo) mortgages, home prices increased by 4.92% during 2018. For a median priced home in Portland ($423,000) that appreciates by 4.92% it will only take 18 years for the home to be worth $1,000,000 (2037).
Why is there a discrepancy between the two reports? The discrepancy is likely related to the fact that higher priced homes, which are generally bought with jumbo mortgages, are not appreciating as much as median and lower priced homes which are secured by conforming loans.
The Federal Reserve
Fed Chairman Jerome Powell is scheduled to testify on Capitol Hill tomorrow. The interest rate markets will be listening for clues on how monetary policy will evolve during 2019. Last week, the Fed commented that they may slow rate hikes.
From a technical perspective interest rates have been trading in a sideways pattern. If rates continue without much volatility then we could set ourselves up for a “breakout” which is when interest rates move sharply lower or higher (we never know in advance).
Current Outlook: cautiously floating