We’re Already Seeing the Stock Market Selloff Spill Into the Housing Market
It’s especially notable in places where stock-based comp is significant.
Fed policy works by affecting financial conditions. The clearest example of this is mortgage rates, which have shot up since the tightening cycle began.
But financial conditions also includes the stock market. A common thing you hear is that “the stock market is not the economy,” which is somewhat true. There’s obviously more to the economy than just whether the S&P 500 is making new records or not.
However that doesn’t mean that the stock market doesn’t have significant downstream impacts into the ‘real world.’ The most obvious way we see this is how the selloff in tech stocks has already fed into a slowdown in VC activity, declining valuations and now, layoffs in the sector.