But this is not the only sector to take a hit.
“It’s been a crazy year,” Matt Holm, a Compass agent in Austin, Texas, recently told my CNN Business colleague Anna Bahney.
He recalled a smaller five-year-old house he put on the market last January for $ 425,000, already higher than listings for comparable properties. The interest was immense.
“I stopped counting at 35 offers,” he said. The house sold for $ 545,000, a 30% increase from the list price.
Shares of Toll Brothers rose nearly 67% in 2021, compared to a 27% jump in the S&P 500. Lennar gained 52% and PulteGroup climbed 33%.
But the prospect of rising interest rates, which serves as a crucial benchmark for mortgage loans, is shaking things up.
The Federal Reserve has indicated that the era of low rates will end soon given the need to fight inflation and signs that the economy is returning to normal. Employment data released on Friday confirmed expectations on this front.
“With an unemployment rate below 4% and increasing wage pressure, the Fed seems ready to react quickly,” James Knightley, ING’s chief international economist, told clients.
In a note released Sunday night, Goldman Sachs said it now expects the Fed to hike interest rates four times this year starting in March. He had previously entered three increases in pencil.
This could be good news for potential buyers who have been left behind by affordability concerns, but lead to a weaker year for companies like Toll Brothers and Lennar who have been riding the wave.
Could Big Oil Taxes Rise Along With Energy Costs?
This is a question the UK government is under increasing pressure to answer as UK households face skyrocketing bills, reports my CNN Business colleague Charles Riley.
The main opposition Labor Party this weekend called on Prime Minister Boris Johnson to impose a one-off tax on companies pumping oil and gas from the North Sea, saying the money raised could be used to reduce by 200 £ ($ 272) soaring household bills.
The party has reportedly said the corporate tax rate that businesses pay should be increased by 10 percentage points for a year. It would also allow the government to increase energy subsidies for the poorest households.
The big picture: UK consumers will pay around $ 1,075 more to heat and light their homes this year, according to Bank of America, following a dramatic spike in wholesale energy prices that sparked the collapse of dozens of UK energy suppliers in recent months.
Wholesale gas prices in Europe jumped 400% from the previous year and electricity prices rose 300%, according to Bank of America. The increases are due to the cold, the shutdowns of nuclear power plants in France and the reduction in gas flows from Russia.
BP and Shell both operate in the North Sea and have benefited from rising gas and oil prices. BP CEO Bernard Looney told the Financial Times in November that soaring commodity prices had turned the company into a “cash machine”. The company posted profits of $ 3.3 billion in the third quarter of 2021 and said it plans to return an additional $ 1.25 billion to its shareholders.
The rebuttal: Industry group OGUK, which represents UK offshore producers including Shell and BP, said last week that a one-off tax would make energy companies less likely to invest in the country, causing “irreparable damage to the country. industry “that” would leave consumers even more exposed to global shortages.
Why Nike and Ralph Lauren are getting harder to find
These days you are probably more likely to catch them in their own stores or on their websites than in the smaller chains.
Instead, they focus their efforts on getting customers to buy directly from their own channels as well as a select group of wholesale partners.
The strategy: Selling directly to customers allows brands to make more money, control their prices, and present products exactly the way they want in in-store displays. They can also prevent their labels from being discounted too heavily, which could weaken their branding and pricing power.
But the change means shoppers will have fewer places to purchase some of their favorite products. It also puts pressure on retailers who will no longer be able to stock much sought after shoes and clothing.
Under Armor and Ralph Lauren have stopped sending merchandise to discount stores like TJ Maxx, while Nike stops new shipments to the DSW shoe warehouse.
Coming Up: All eyes are on the latest US consumer price data, due Wednesday.