Morning Download 

Personal finance + economics + markets

Good morning investors! Two big companies announced earnings yesterday with some surprises.

Fun fact: The number of housing units in the United States has been growing year-on-year and in 2022, there were approximately 144 million homes; however, there’s still a shortage.

Today we cover:

• Falling mortgage demand.

• Netflix and Tesla.

• Why it's so hard to buy a house.

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📊 Economy and News 

Mortgage demand continues to fall

Mortgage demand has fallen to the lowest level since 1995.

Applications for a mortgage to purchase a home dropped 6% week to week and were 21% lower than the same week one year ago.

Applications to refinance a home loan fell 10% for the week and were 12% lower than a year ago.

But why? due to increasing interest rates. Houses are more expensive than ever, which is pushing buyers away.

Will things change? Things will change but nobody knows when. Experts predict rates to fall in 2024, after Fed is able to bring inflation down to 2%. On the plus side, homebuilding bounced back in September after dropping in August to the lowest levels since 2020. Building permits, however, dropped in September, falling 4.4% from August’s revised number to a seasonally adjusted annual rate of 1.473 million.

Global hits:

• UK inflation holds steady for September after the Bank of England pauses rate hikes.

• Saudi prince aims to get 1.5% GDP growth from sports.

• China’s third-quarter growth exceeds forecast, consumer spending and industrial production offer hope.

📈 Stocks

S&P 500 4,314.60 (-1.34%)
DJIA 33,665.08 (-0.98%)
NASDAQ 14,909.26 (-1.41%)
VIX 19.55 (1.72%)
* Prices as of Oct 19th, 12:20 AM UTC

It was a mad day for the market:

• The U.S. 10-year Treasury yield climbed more than 7 basis points on Wednesday, breaking above 4.9% for the first time since 2007. The shorter-term 2-year yield was also higher on the day, hovering near its highest level since 2006.

• Tesla reported adjusted earnings of $2.3 billion in the quarter, or 66 cents a share, down 37% from a year earlier and the smallest profits it reported in two years. The stock is down 6.82% premarket.

• Netflix shares rose nearly 14% in premarket trade early Wednesday after its third-quarter results beat expectations. If you are invested in the company then it's time to be happy. The streaming provider added 8.8 million subscribers, the best performance since the height of the pandemic. Moreover, it’s increasing prices in some countries.

🔐 Crypto

Bitcoin $28,472.70 (0.01%)
Ethereum $1,553.02 (0.68%)
Total market cap $1.08 (-0.47%)
* Prices as of Oct 19th, 12:20 AM UTC

Here’s all you need to know about the latest happenings in the world of crypto:

• New crypto tax rules for EU: The European Union is adopting a new law that will mandate cryptocurrency firms to share customer holdings, which will be automatically shared between tax authorities.

• Binance delists coins: Things are changing at Binance. The leading global cryptocurrency exchange will delist and discontinue ADAUP and ADADOWN leveraged tokens on November 1, 2023.

• What the charts say about XRP: The XRP price witnessed supply pressure at the $0.5 mark and it seems the price is going lower. The intraday trading volume in the XRP is $619 Million, indicating a 13% loss. The coin has been under pressure and has fallen 11.2% in October, down to $0.489 from $0.548. Bears are currently in control. Should the sellers break below the low of the retest candle at $0.485, we could potentially see XRP decline a further 6.5% to reach the combined support level at $0.458 and a longer-term trendline.

  Reminder: Bitcoin metrics ‘improve bullish odds’ as BTC price holds a 200-week trendline.

💵 Personal Finance

It’s getting harder and harder to buy a house, here’s how to improve your chances

The US homeownership rate is only 65.8%. There is a housing crisis and most people are not able to afford a house thanks to rising prices and high mortgage rates.

Available credit for mortgages tightened even more in the previous month, falling to its lowest level in over ten years. This indicates tightening lending standards and the difficulty in getting approved for a loan.

Still, there are ways to get approved:

• Improve your credit score, you’re more likely to get approved if you have a score of 620 or higher.

• Work on your debt-to-income (DTI) ratio and try to keep it under 40%.

• Lenders pay attention to income history. You're more likely to be approved if you have been employed for at least two years or if you have a solid and guaranteed income. Also, all income must be provable.

• Show your assets as accessible funds prove liquidity. Also, consider going for a large deposit as it helps bring the LTV ratio down and makes you eligible for more deals.

• This might come as a surprise but the property type can impact your chances of approval. Applicants looking for a primary residence find it easier to get approved than applicants looking for an investment property. However, in some cases, buying a rental property first may make more sense.

• Consider paying off existing debt and avoid applying for new debt.

Always compare lenders and choose the right mortgage option. Government-backed loans such as FHA, VA, and USDA loans are more affordable and easier to apply. On the other hand, conventional loans are stricter to qualify for.

Ready to buy a house? Check out the video below for more on saving to buy a house:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.