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In today's big story, we're looking at how much Americans spend on rent and why cheap properties are so hard to come by.
What's on deck:
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Markets: The stock market rally could end in disaster, according to one Wall Street bull.
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Tech: Some Amazon employees are considering unionizing over RTO mandates.
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Business: US real GDP continues to grow, beating forecasts.
But first, the rent is too damn high.
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The big story
Housing woes
High interest rates, low supply, and sky-high prices dragged the housing market to a screeching halt last year. And now a new Harvard study demonstrates how costly the rental market has become, Business Insider's Pete Syme writes.
Harvard's Joint Center for Housing Studies estimated 12.1 million American households spend more than half their income on rent and utilities. That number grows to 22.4 million households for those spending more than 30% of their income on rent and utilities.
Both figures are a record high based on data dating back to 2001.
And before you say it, this isn't a matter of people living beyond their means. Cheap rent has become extremely hard to come by, BI's Eliza Relman and Juliana Kaplan write.
Even after adjusting for inflation, the number of rentals for less than $1,000 plummeted from 2012 to 2022, according to Harvard's research. Meanwhile, rentals priced over $2,000 have more than doubled during the same timeframe.
There's still some room for optimism regarding housing affordability.
The rental market is starting to cool off after a post-pandemic surge, as outlined in the Harvard study and previously reported by BI. Meanwhile, experts predict the housing market will reverse course this year as housing inventory increases and mortgage rates fall.
That'll provide some much-needed relief. But I wonder if other trends could throw a wrench in those plans.
For one, companies continue to push workers back into the office. As a result, people will have less flexibility with where they settle down, forcing an increased focus back on properties within a commutable distance of major cities.
(To be sure, so-called Zoomtowns that exploded in popularity during the pandemic also have problems.)
But even more broadly, no one really knows where the real-estate market will ultimately end up.
For as many good signs as there are, concerns remain. The most obvious is the mountain of debt in the battered commercial real-estate market, with some $2.2 trillion in debt expected to mature by 2027.
And while trouble with office buildings and malls doesn't necessarily correlate to homes and apartment buildings, it adds to the uncertainty and fear that's persisted in the broader market for a while.
3 things in markets
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A top economist shares his predictions on China. Market Securities' Christophe Barraud already accurately predicted the Chinese government's most recent move to prop up its struggling economy. Here's what he thinks might come next. Meanwhile, market experts say attempts to rescue the country's stock market won't work.
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One of Wall Street's biggest bulls thinks the market is at risk of getting ahead of itself. The recent record highs of the S&P 500 have given market vet Ed Yardeni pause. Sentiment measures like the put-to-call ratio are bearish signals that could lead to a market meltdown.
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But others still see plenty of value in the market, including in tech. John Stoltzfus, the chief investment strategist at Oppenheimer Asset Management, doesn't see stocks as being overvalued. He explained his rationale and why sectors like information technology and communication services still have room to run.
3 things in tech
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Apple is opening up its App Store for the first time, albeit begrudgingly. It will now let developers create and distribute apps without using the App Store, and will take a smaller cut of payments made on apps distributed through the App Store. It's also reportedly planning a big push into AI, and could launch an AI-powered Siri.
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Some Amazon workers are discussing unionizing. A small number of employees at the tech giant have discussed forming a union in light of Amazon's strict return-to-office policy. One staffer shared Kickster's union contract as an example on an internal message board.
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Amazon's Audible CEO warns of a "storm" on the horizon. In a meeting following a 5% cut to its workforce earlier this month, Audible CEO Bob Carrigan answered staffers' questions, but stopped short of saying layoffs are over.
3 things in business
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The US economy ended 2023 on a high note. A news release from the Bureau of Economic Analysis showed that real GDP grew at an annualized rate of 3.3% in the fourth quarter, outstripping the forecasted 2.0%.
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Alaska Airlines braces for a $150 million hit after grounding its Boeing planes. The company expects a massive hit to its full-year profit and a slowdown in the airline's planned growth.
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Not even Tesla can dodge the EV sales slowdown. Electric-vehicle sales are chugging along, but at a slower pace than in months past, and not even Tesla has been spared. In the company's Wednesday earnings call, Elon Musk said Tesla is "between two major growth waves."
In other news
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Trump loses battle with E. Jean Carroll judge as testimony gets cut short.
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Microsoft is laying off 1,900 workers at Activision and Xbox.
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Denver's Basic Income Project has been so successful it's getting more funding and an extension.
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AI deepfakes threaten to wreak havoc with the world's year of elections.
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Holy crap, look how small and old 'The Daily Show's' audience has gotten.
What's happening today
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Earnings today: American Express, Hyundai, and other companies.
The 2024 Sundance Film Festival Awards will be announced.
For your bookmarks
Loud luxury
Quiet luxury may be in, but loud luxury still sells. Brands like Hermès sell $125 envelopes if you're looking to spice up your snail-mail habits, and Dolce & Gabbana offers a $700 toaster for some ultra-luxe avocado toast.
Editor's note: Thursday's edition included an incorrect subhead in the Big Story section. The subhead should have read "Microsoft's milestone."
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, editor, in London. Jordan Parker Erb, editor, in New York.