Housing Engagement (Not Activity) is Overlooked Theme; Spending Deceleration of 80 bp Last Week (Despite Gasoline Contribution); Sentiment All-Time Lows (Despite Wealth Effect Support): Macro Monday

By David Schick and Jonathan Feeney and David Katzman and Jack Hermann Published on April 20, 2026 PDF

Summary: (1) a key overlooked theme in our discussions is the currently frozen housing market due to energy driven interest rate spike in March – our math suggests 18% of GDP tied to US housing turns, household behaviors in April suggest significant pent-up potential, see Chart of the Week; (2) our analysis suggests consumer spending slowed again last week and has decelerated over the last 4 weeks, see Fig 1; (3) gasoline prices up +43% y/y despite declines last week and continue to eat into discretionary spending, see Fig 7; (4) Sentiment is at all-time lows, despite strong equity markets providing wealth effect gains, see Fig 16.

Chart of the Week … “Sell My House” v Existing Home Sales

Source: Optimal Advisory Analysis, Google Trends, National Association of Realtors

Our Consumer Velocity tracker remained positive but decelerated 80 bp last week, up +1.9% y/y T4W following +2.7% y/y last week. This metric was running up +3-4% in 3Q25. The trailing Consumer Velocity 12-week trend is up +2.3% y/y (0.6 standard deviations below average) vs. +2.2% y/y the prior week. See Fig 1-2.

Housing potential is robust but kinetic energy is significantly softer as mortgage rates / bond markets have been pressured higher by oil inflation. US 30Y FRM rate lower after spiking 2 weeks ago; now running down -31 bps y/y on a T4W basis (0.6 standard deviations below average since 2020). MBA’s mortgage applications for purchase running down -7% y/y while refinance applications running down -4% (refinance applications was running up +100% y/y just 6 weeks ago). Median home prices are down -0.6% y/y (1.3 standard deviations below average since 2020). Roughly 18% of Americans sell, build, fix, lend to, and furnish homes – velocity matters for the economy. See Fig 3-6.

Gasoline inflation is now +43% y/y for the week ending last Friday, down from +52% the week prior and +60% two weeks ago (gas prices softened last week). Gasoline spending, by our math, is responsible for roughly 70%+ of current nominal spending growth (inflated prices and decelerated denominator). As we have noted, external impacts to consumer behavior need time to set and gas stations started to see a spike in spending around March 7th. We also note utilities (electricity and heating fuel) run from about 9% of lower-income household spending to 4% for higher-income households. See Fig 7-8.

Sentiment is at all-time lows (at 47.6 right now), down -9% y/y this month despite lapping exceedingly weak comparisons. Overall, headline Sentiment is down -9% y/y both this month alone and on a T3M basis (0.8 standard deviations below average) and -19% y/y on a T9M basis (1.8 standard deviations below average). Upper-third income Sentiment has declined -5% y/y on a T3M basis (0.4 standard deviations below average), after declining -12% y/y T3M last month. Middle-income Sentiment has declined -9% y/y on a T3M basis (0.7 standard deviations below average) compared to -13% last month, and lower-income Sentiment has declined -15% y/y on a T3M basis (1.3 standard deviations below average) compared to -17% last month. See Fig 9-12.

Consumer “Wealth Effect” accelerated due to y/y comparisons. Optimal Advisory’s Wealth Effect Index is at +11.3% y/y (0.1 standard deviations above average since the start of 2022). Equity returns have been strong, shrugging off conflict in the Middle East and higher energy prices, while beginning to lap a softer market from April 2025. With home prices flat y/y we note the “flywheel” of wealth effect turning higher. See Fig 13-16.

Our Multifactor Macro Market Model has been suggestive of March 2026 softness, rebound. Optimal’s Multifactor Macro Market Model projects the S&P 500 as well as bull and bear cases based on lagged data for 12 macroeconomic factors. The model suggested the S&P 500 to fall to just below 6000 by March, before rebounding back up to 6400 by May. We use this model as a guide to how macro would guide the market, given our analysis of current variables. This is, of course, outside of other factors at work. See Fig 17-18.

Figures 1-2: Optimal Advisory Consumer Velocity Monitor

Source: Optimal Advisory Analysis, Bloomberg Second Measure

Consumer Spending y/y Relative to Historical Average

Source: Optimal Advisory Analysis, Bloomberg Second Measure

Figures 3-6: Housing Kinetic Energy

Source: Optimal Advisory Analysis, Freddie Mac, Zillow, Redfin

Mortgage Rates, For Sale Inventory, & Median List Price y/y Relative to Historical Averages (Since 2020)

Source: Optimal Advisory Analysis, Freddie Mac, Zillow, Redfin

Figures 7-8: Gas Prices y/y

Source: Optimal Advisory Analysis, Bloomberg

Gas Prices y/y Relative to Historical Averages (Since 1992)

Source: Optimal Advisory Analysis, Bloomberg

Figures 9-12: Consumer Sentiment T3M and T9M y/y

Sentiment y/y by Income Tercile Relative to Historical Averages

Comparison of Sentiment y/y Across Income Terciles

Source: Optimal Advisory Analysis, University of Michigan Consumer Survey

Figures 13-16: Consumer Wealth Effect & Components y/y

Source: Optimal Advisory Analysis, Bloomberg, Zillow, Redfin

Median Home Price y/y, S&P 500 y/y, & Wealth Effect Index (Since 2022)

Source: Optimal Advisory Analysis, Bloomberg, Zillow, Redfin

Figures 17-18: Optimal Advisory Multifactor Macro Market Model

Historical Test Predictions vs. Actual (On Test Data Only)

Source: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, BLS, BEA, OECD, University of Michigan Consumer Sentiment Survey, U.S. Census Bureau, FRB

Actual & Projected S&P 500 (Including Training & Test Data) with Confidence Intervals

Source: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, BLS, BEA, OECD, University of Michigan Consumer Sentiment Survey, U.S. Census Bureau, FRB

Figure 19: Index & Sector Performance

Source: Optimal Advisory Analysis, Bloomberg, prices at intraday 4/20/2026

DISCLOSURES AND DISCLAIMERS

Analyst Certification

The analyst primarily responsible for the preparation of this report attests to the following: (1) that the views and opinions rendered in this report reflect his or her personal views about the subject companies or issuers; and (2) that no part of the analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this report.

Analyst Certifications And Independence

Each of the Optimal Advisory analysts whose names appear on the front page of this report hereby certify that all the views expressed in this Report accurately reflect our personal views about any and all of the subject securities or issuers and that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views of in this Report.

Optimal Advisory (the “Company”) is an independent equity advisory provider. The Company is not a member of the FINRA or the SIPC and is not a registered broker dealer or investment adviser. Optimal Advisory has no other regulated or unregulated business activities which conflict with its provision of independent advisory work.

Limitations Of Research And Information

This Report has been prepared for distribution to only qualified institutional or professional clients of Optimal Advisory. The contents of this Report represent the views, opinions, and analyses of its authors. The information contained herein does not constitute financial, legal, tax or any other advice. All third-party data presented herein were obtained from publicly available sources which are believed to be reliable; however, the Company makes no warranty, express or implied, concerning the accuracy or completeness of such information. In no event shall the Company be responsible or liable for the correctness of, or update to, any such material or for any damage or lost opportunities resulting from use of this data.

Nothing contained in this Report or any distribution by the Company should be construed as any offer to sell, or any solicitation of an offer to buy, any security or investment. Any research or other material received should not be construed as individualized investment advice. Investment decisions should be made as part of an overall portfolio strategy and you should consult with a professional financial advisor, legal and tax advisor prior to making any investment decision. Optimal Advisory shall not be liable for any direct or indirect, incidental or consequential loss or damage (including loss of profits, revenue or goodwill) arising from any investment decisions based on information or research obtained from Optimal Advisory.

Optimal Advisory may receive consulting or other compensation from securities mentioned but is not related to any recommendation in this report.

Reproduction And Distribution Strictly Prohibited

No user of this Report may reproduce, modify, copy, distribute, sell, resell, transmit, transfer, license, assign or publish the Report itself or any information contained therein. Notwithstanding the foregoing, clients with access to working models are permitted to alter or modify the information contained therein, provided that it is solely for such client’s own use. This Report is not intended to be available or distributed for any purpose that would be deemed unlawful or otherwise prohibited by any local, state, national or international laws or regulations or would otherwise subject the Company to registration or regulation of any kind within such jurisdiction.

Copyrights, Trademarks, Intellectual Property

Optimal Advisory, and any logos or marks included in this Report are proprietary materials. The use of such terms and logos and marks without the express written consent of Optimal Advisory is strictly prohibited. The copyright in the pages or in the screens of the Report, and in the information and material therein, is proprietary material owned by Optimal Advisory unless otherwise indicated. The unauthorized use of any material on this Report may violate numerous statutes, regulations and laws, including, but not limited to, copyright, trademark, trade secret or patent laws.

Additional Information is available upon request.

For more information on receiving Optimal Advisory, email: [email protected]