Cooling home prices, EV charging stations, and 2023 contribution limits
The Sandbox Daily (10.25.2022)
Welcome, Sandbox friends.
Today’s Daily discusses the 2nd consecutive month of cooling home prices, mapping EV charging stations across the United States, and the 2023 contribution limits.
Let’s dig in.
Markets in review
EQUITIES: Russell 2000 +2.73% | Nasdaq 100 +2.10% | S&P 500 +1.63% | Dow +1.07%
FIXED INCOME: Barclays Agg Bond +0.98% | High Yield +0.96% | 2yr UST 4.474% | 10yr UST 4.104%
COMMODITIES: Brent Crude -0.41% to $92.88/barrel. Gold +0.20% to $1,657.4/oz.
BITCOIN: +4.45% to $20,123
US DOLLAR INDEX: -1.02% to 110.849
CBOE EQUITY PUT/CALL RATIO: 0.62
VIX: -4.66% to 28.46
U.S. home prices fall for second straight month in August
Home prices are still higher than they were a year ago, but the recent two month’s decline in prices is a clear indication that the surge in mortgage rates and the sharp drop in affordability have sapped housing demand.
The S&P CoreLogic Case-Shiller National Home Price Index fell -0.9% in August, its second consecutive monthly decline and the most since February 2010. The 10-city and 20-city composite indexes (tracking the 10 and 20 largest housing markets in the United States) each fell an even larger -1.3%, the steepest drop since March 2009. Home prices fell in 18 of the 20 metro areas and were unchanged in two.
On a YoY basis, the National Home Price Index eased to +13.0% from +15.6% in the prior month and a peak rate of +20.8% back in March. The current annual rate of price growth is the slowest since February 2021. Although home price changes show up in the CPI with a significant lag, the rapid deceleration may facilitate the Fed’s step-down and eventual halt of rate hikes next year.
“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” Craig J. Lazzara, managing director at S&P DJI, said in news statement. “These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since."
Source: Ned Davis Research, Bloomberg
EV charging stations across the United States, mapped
As the electric vehicle market continues to expand, having enough EV charging stations is essential to enable longer driving ranges and lower wait times at chargers. Currently, the U.S. has about 140,000 public EV chargers distributed across almost 53,000 charging stations, which are still far outnumbered by the 145,000 gas fueling stations in the country.
As America works towards The Biden Administration’s goal of having half of all new vehicles sold in 2030 be zero-emissions vehicles (battery electric, plug-in hybrid electric, or fuel cell electric), charging infrastructure across the nation is essential in improving accessibility and convenience for drivers. Here is a look at which states currently lead in EV charging infrastructure.
What’s next? The Biden administration has given early approval to 35 states’ EV infrastructure plans, granting them access to $900 million in funding as part of the $5 billion National Electric Vehicle Infrastructure (NEVI) Formula Program set to be distributed over the next five years. Along with this program, a $2.5 billion Discretionary Grant Program aims to increase EV charging access in rural, undeserved, and overburdened communities, along with the Inflation Reduction Act’s $3 billion dedicated to supporting access to EV charging for economically disadvantaged communities. With more than $10 billion being invested into EV charging infrastructure over the next five years and more than half the sum focused on communities with poor current access, charger availability across America is set to continue improving in the coming years.
Source: Visual Capitalist
2023 contribution limits
In an unprecedented move, the Internal Revenue Service (IRS) announced last week that it will boost the maximum contribution limit to employee 401(k) accounts by $2,000 next year to $22,500, the largest increase on record. The change will enable millions of Americans to save and contribute thousands more dollars to tax-advantaged retirement accounts.
The contribution limit for an individual retirement account (IRA) is also set to increase, to $6,500 in 2023 from $6,000 this year – a limit that hasn’t been changed since 2019.
For people aged 50 and older who are nearing retirement, the catch-up contribution limit for a 401(k) will rise by $1,000 to $7,500. The catch-up contribution limit for IRAs, which aren’t indexed to inflation, will stay at $1,000.
The IRS is also raising the income threshold for which tax deductions for IRA contributions will be phased out. That will be set at $73,000 to $83,000 for individuals and single heads of households, or between $116,000 and $136,000 for married couples filing jointly. The previous range was set at $68,000 to $78,000 for singles, or $109,000 to $129,000 for married couples.
Source: Sandbox Financial Partners
That’s all for today.
Blake
Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily.