Inflation, a surging homebuyer’s market, and rising bitcoin prices all made the week of Oct. 11, 2021, list for hot news topics that will impact Black people and their ability to achieve and maintain wealth. Here’s what happened over the week.
1. Build It, But They Might Not Come: U.S. Demographics Indicate Need For Less Home Construction
Despite the current strong surge in home buying, analysts argue that too many homes are actually being built and do not match current U.S. demographics.
Dennis McGill, director of research at Zelman & Associates, told CNBC that although the competition is fierce to purchase a home, it is not an indication of the need for developers to build more homes. Demographics should be used to determine home development construction, not factors associated with the pandemic, stressed McGill.
Why is this important? Overbuilding could result in too many homes for the market, making it much more difficult for those looking to sell their homes.
Home sales numbers already are decreasing. According to the National Association of Realtors, home sale inventory was down by 1.29 million units at the end of August, and this is a 13.4 percent decline compared to August 2020.
2. Politicians Debate Over Home Ownership Assistance Grant
Among the debates dominating D.C. these days, Democratic legislators don’t want a homeownership assistance grant to be stripped from President Joe Biden’s Build Back Better spending package. The Dems argue that the grant will help close the wealth gap existing between Black and white households.
The current gap existing between Black and white homeowners is larger than it was in 1968. Recent studies found that the homeownership rate for Black families was less than 45 percent, compared to 73 percent for white families.
3. Wall Street: Inflation Increases Expected
You’ll be spending more, at least for a while, as inflation continues to rise. Driven by supply chain pressures, rising energy prices, and gains in rent and medical costs, economists say that inflation is expected to increase 0.3 percent in September, or 5.3 percent on a year-over-year basis.
According to the U.S. Department of Labor, prices have increased in many areas. For instance, gas prices have jumped 42 percent while the cost for used cars has also increased 24 percent. Increases in food prices also were noted. Meat, poultry, fish and eggs saw a price increase of almost 11 percent, while restaurant prices have also risen 4.7 percent. Also notable were rent hikes of nearly 3 percent.
4. Bitcoin Prices Soar, Pushing Hope for SEC Approval
As Bitcoin prices continue to surge throughout October, cryptocurrency investors are hopeful that the Securities and Exchange Commission will approve a bitcoin future exchange-traded fund.
Still, the volatility of bitcoin in the market is not stable.
A recent tweet from the SEC’s Office of Investor Education and Advocacy read, “Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”
5. Celebs Making Major Deals
Two celebs are expanding their brands through strategic partnerships, allowing them to increase their net worth.
NBA Basketball star LeBron James is making major money moves with his entertainment company, SpringHill. James announced last week that he is selling a minority stake in the company to a group of investors, including Nike. SpringHill received a valuation of $725 million.
SpringHill has produced such films as “Space Jam: A New Legacy” and television shows such as “The Shop” and “Shut Up and Dribble.” The company noted that the increased investment would allow the brand to produce new shows and expand its reach in other countries through licensing and programming.
Hip-hop artist Meghan Thee Stallion also is expanding her brand. Recently partnering with Popeyes, Megan Thee Stallion will offer several menu items with the fast-food chain and introduce merchandise, including Hottie Sauce.