US Home Sales Hit 14-Year High And General Motors Ups Electric Vehicle Spending

US Home Sales Hit 14-Year High And General Motors Ups Electric Vehicle Spending

over 3 years ago3 mins

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Fresh data out last week showed US existing home sales hit a 14-year high in October, so you’d better get ready to welcome some friendly new faces into your neighborhood 🏡

What does this mean?

Sales of previously owned US homes climbed by 4.3% last month compared to the month before, bringing the annualized number of home sales – that is, the number over the next 12 months if October’s pace were maintained – to almost seven million 📆 That’s the highest level since February 2006, while the all-time highs of 2005 might’ve been beaten too if the supply of homes wasn’t the lowest on record. So it makes sense that prices are on the rise as well, with the median selling price for a home jumping 15.5% from a year ago.

The most expensive US homes are driving the surge in total sales

While we’re on the subject of record lows: US mortgage rates are now at their lowest since tracking began, which is arguably driving this whole house-buying bonanza. It’s probably not worth getting too excited, though: that’s the 13th time the record’s been broken this year…

US previously owned home sales unexpectedly rise to strongest since 2005

Why should I care?

With the shortage of existing homes boosting demand for new ones, the S&P Homebuilders index – which tracks stocks in the homebuilding industry – has outperformed the overall US stock market by 14% this year 🛠 Eager home-builders are certainly playing their part: the construction of one-family homes – the biggest portion of the housing market – just hit its fastest pace since 2007.

The National Association of Realtors – the organization behind most of this data – reckons the housing market will keep growing into 2021. In fact, it’s said existing home sales will be 10% higher next year thanks to still-low mortgage rates and the impending coronavirus vaccine 💉 As for how much value your framed “Live. Laugh. Love.” calligraphy will add to your bohemian apartment, it just can’t say.

Neighbor gif

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General Motors Ups Electric Vehicle Spending

GM image

General Motors (GM) has the power... to one-up its rivals: the carmaker announced late last week it’ll boost its spending on electric vehicles (EV) through 2025 ⚡️

What does this mean?

GM will top up the $20 billion investment it announced back in March with an extra $7 billion, which should help the carmaker reach its ambitious goal of releasing 30 new EVs by 2025. And since the majority of its new vehicles will feature the company’s upcoming Ultium battery cells, they’ll all reportedly have a range of up to 450 miles – even further than the 402 mile radius of Tesla’s Model S Long Range Plus introduced in June 🔋 Better still, GM says its new battery cells should bring the price of its EVs in line with the company’s current gas-powered models by the middle of this decade.

GM invests in a zero-emission future

Why should I care?

There’s growing pressure on carmakers to phase out gas engines: just last week, the UK banned the sale of new petrol and diesel cars from 2030 onward. That means competition is fierce: GM’s EV spending is dwarfed by Tesla and Volkswagen, which is planning to invest $86 billion into EVs over the next five years 💰 But all three are using the same playbook: they’re developing their own batteries – the most expensive component and most influential over profitability – rather than buying them from third-party suppliers.

Cost breakdown for EV battery-cell production
Source: The Wall Street Journal

All this is in keeping with what BlackRock’s been seeing lately: the world’s biggest investment manager said late last week that investors have been allocating more than twice as much money in its funds that invest in climate change this year ♻️ It’s also noticed that companies focused on so-called “stakeholder capitalism” – that is, on serving the interests of all stakeholders – have been outperforming their stock market rivals.

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