Commentary-Housing Auto Market-Print

e Change e Change

TOTAL AUTO SALES 2002–2017 TOTAL AUTO SALES 2002–2017

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KEY TAKEAWAYS   As vehicle production levels off in the United States, manufacturers are already giving dealers more latitude to move cars with rebate and incentive programs, and this will only increase in the future.  With the Fed likely to raise interest rates another quarter point in June, look for new car inventories to sit a while as lenders adjust their rates and buyers recalculate the cost of their big-ticket purchases.  Single-family housing inventories continue to shrink and average home prices will likely trend even higher.  Home lending rates are still very low relative to historical norms, so a Fed interest rate increase in June should not dampen home demand at this point.

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Bloomberg

Figure 1 Figure 1

FIGURE 1

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TOTAL HOME SALES 2002–2017 TOTAL HOME SALES 2002–2017

1,000 1,000 1,500 1,500 2,000 2,000 2,500 2,500

Average new household formation 1.25 million per year Average new household formation 1.25 million per year

500 500

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Bloomberg Bloomberg

Figure 2 Figure 2

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Past performance is no guarantee of future results, and the opinions and other information in the commentary are as of May 30, 2017. This summary is intended to provide general information only and is reflective of the opinions of Commerce Trust Company’s Financial Advisory Services Group. This material is not a recommendation of any particular security, is not based on any particular financial situation or needs, and is not intended to replace the advice of a qualified attorney, tax advisor or investment professional. Diversification does not guarantee a profit or protect against all risk. Commerce does not provide tax advice or legal advice to customers. Consult a tax specialist regarding tax implications related to any product and specific financial situations. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. ast performance is no guarantee of future results, and the opinions and other information in the commentary are as of May 30, 2017. his summary is intended to provide general information only and is reflective of the opinions of The Commerce Trust Company. his material is not recommendation of any particular security, is not based o any particular fin cial situation or need, and is ot intended to replace th advice f a qualifi d ttorney, t x advisor or i vestm nt professional. Divers fication does not guarantee a rofit or protect against all risk. ommerce does not provide tax advice or legal advice to customers. Consult a tax specialist regarding tax implications related to any roduct and specific financial situation. ata contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, ompleteness or reliability cannot be guaranteed. ast performance is no guarantee of future results, and the opinions and other informatio i the commentary ar as of May 30, 2017. his summary is intended to provide general information only and is reflective of the opinions of The Commerce Trust Company. his material is not recommendation of any par cula security, is n t bas d on any particular financial situation r eed, and is ot intended to replace the advice of a qualified attorney, tax advisor or investment professional. Diversification does not guarantee a rofit or protect against all risk. mmerce does not provide tax adv ce or legal advice to customers. Consult a tax specialist regarding tax implications related to any roduct and specific financial situatio . ata contained h rein from third-party p ovid rs is obtained from what are considered reliable sources. However, its accuracy, ompleteness or reliability cannot be guaranteed.

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