Insider Today: Good luck buying a home

July 12, 2023

Hey there! Here's a fun story about a Connecticut dry cleaner turning into an expressway for turtles looking to lay their eggs in a local marsh.

Unfortunately, there's no such shortcuts in the housing market, as the industry remains impossibly difficult for potential buyers.

In today's edition:

China is at risk of facing deflation, and that's bad news for the global economy.
Twitter is on its way to a fate worse than death for a social-media site: irrelevance.
He infiltrated NYC high society with a bunch of fake Birkins.

But first, I've got a great property for you to see.

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THE BIG STORY

Home-buying horror

Arif Qazi / Insider

If you're waiting for mortgage rates to drop before buying a home, get comfortable.

A 7% rate, which seemed eye-poppingly high just a few years ago, is now being viewed as the "new normal" among homebuyers, according to Compass CEO Robert Reffkin.

You might be quick to dismiss Reffkin's comments as an executive talking his book. After all, it's in Compass' best interest for people to keep buying homes.

But a look at the numbers shows Reffkin isn't that far off. Mortgage purchase activity increased in three out of the last four weeks, per Mortgage Bankers Association data.

Reffkin's assessment is the latest in what has been a series of letdowns for potential homebuyers over the past few years.

The housing market has entered an "Ice Age", per Insider's James Rodriguez, whereby those who didn't get in at the right time now seem doomed to be forever renters.

Nowadays, there's an endless amount of hurdles for homebuyers to navigate:

High mortgage rates. Check.
Limited supply. Check.
Elevated pricing. Check.
All-cash buyers. Check.

So to recap: There's not many homes on the market, and the ones that are listed are overpriced. But if you can outmaneuver the deep-pocketed, all-cash buyers, you're rewarded with a high rate.

And lest we forget, buying now could end up being a catastrophe if the US economy does end up falling into a recession.

Of course, when millennials, the group most-often trapped in this hell cycle, raise these issues with their boomer parents they aren't met with much sympathy.

"That's nothing! The mortgage rate on my first house was 18%!"

TOP READS

Birkin bags, ChatGPT, & 'Zombie Twitter'

Johanna Goodman for Insider

The "Birkin Bandit" of the UES. George Mickum penetrated NYC's high society and developed a close relationship with Gillian Hearst, the great-granddaughter of newspaper magnate William Randolph Hearst. But reports of Mickum selling fake Birkin bags to his socialite friends led to his swift removal from the elite social circles.
Welcome to "Zombie Twitter." Twitter was never the largest social network or the most profitable. But it was undeniably relevant — that is, until Elon Musk came in, Linette Lopez writes for Insider. Now, Twitter's free-speech policy has earned the endorsement of a Taliban leader. Meanwhile, people are flocking to rival Threads at a speed that's even surprising Meta and Twitter employees.
Apple, Amazon, and 12 other major companies that restricted employees from using ChatGPT. Many of them are concerned about confidential information (like internal source code) leaking to the chatbot. So companies like Samsung and Spotify are limiting its use.
Prepare the cabin for landing: Summer camp for billionaires. Private jets are descending on Sun Valley, Idaho, for the annual Allen & Co conference, a who's who of top tech, media, and finance execs. Major moneybags like Bill Gates, Jeff Bezos, and Mark Zuckerberg were invited to the event.
ChatGPT lives rent free in the minds of CEOs. Company leaders can't avoid answering questions about it. Big bosses across industries — from online florists to travel companies — have scrambled to try incorporating the tech into their businesses.
Tiger Global's three hedge funds have slowed down on raising new money. For years, the investment firm raised billions of dollars and upended the venture capital landscape. But now, according to government documents and people familiar with the situation, Tiger Global is refocusing its strategy on returns.

BEFORE THE OPENING BELL

China, US economy, & Nasdaq

The cost of things in China is at risk of decreasing, which is a nightmare scenario for the rest of us. The central bank has cut interest rates to initiate growth as China hopes to avoid deflation. But if that fails, the global economy could be in trouble.
The economy feels worse than it actually is because we're all spoiled. The speed at which the economy recovered from the pandemic recession reset Americans' expectations about what a good economy looks like. As a result, good economic data still isn't making people feel good.
The Nasdaq 100 index is getting a makeover. The index is conducting a "special rebalance" due to seven mega-cap tech stocks, including Apple and Microsoft, making up more than 50% of it. The rebalance, which is set to take place before market open on July 24, and could represent a lifeline for index-rebalance strategies that have gone stale.

WHAT ELSE IS GOING ON

WFH chairs, Storm Shadows, & 'Barbie'

Iconic work-from-home Herman Miller chairs are headed to landfills. They're getting discarded and crushed by excavators.
"Oppenheimer" director Christopher Nolan isn't happy with "Barbie" clash. Unlike most of the internet, Nolan is reportedly upset the films share a July 21 release.
Storm Shadow missiles are a new threat to Russian forces in Ukraine. But experts say Ukraine needs to use them carefully.