Five interesting things that Hodges Capital research analysts discovered this week...

#1 WALKING AWAY: Some 60,000 would-be homebuyers walked away from their sale agreements last month, equivalent to nearly 15% of all contracted purchases in the U.S. That’s the highest such share since the depths of the Covid panic in April 2020 and compares to 11% of would-be buyers that cancelled in June 2021 according to Grant’s Interest Rate Observer.

#2 AFFORDABILITY CONCERNS: Also from Grant’s Interest Rate Observer, the median-priced home chewed up 31.5% of the average U.S. wage during the second quarter. That’s the highest such share since the 2007 housing bubble and up sharply from 24% a year ago.

#3 FOREIGN CURRENCY: Per Strategas, nearly 40% of all revenue of the S&P 500 is derived  from outside the United States. With the dollar index reaching a 20-year high relative to most major currencies, a stronger dollar is likely to put downward pressure on sales and earnings due to foreign currency translation effects.

#4 CAR LOANS: The average monthly payment on a new car loan hit a record high of $686 in June, according to new data from auto sales site Edmunds, up 4% from January and 13% year-over-year.

 #5 GEN Z: According to WGSN, luxury spending is on the rise as Gen Z is demanding more from brands due to their buy-better/buy-less mindset and their appetite for experiences. Gen Z has roughly $143 billion in spending power and is expected to make up 40% of global consumer spending by 2035.

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