OUR DAILY THREAD: The Not OK-Shaped Society
Liquidity Über Alles
THE SET-UP: The real estate market sucks … unless you’re selling luxury homes to the “ultra-wealthy.”
Over the last year, ultra-wealthy buyers flexed the arm of the K-shaped economy, lifting the median price of a home to an all-time high of $440,600 in June. But June also saw sales of previously owned homes drop 2.4% from May.
This dichotomy is not inexplicable, though, in the K-shaped real estate market.
The Robb Report explained it:
Market activity has picked up, but much of that fast-paced buying is happening at the high end of the market, skewing the average higher, while first-time buyers are largely being left behind. That momentum is heavily concentrated in major coastal hotspots. San Francisco led the country with a 9.2 percent jump in home prices over the past year, closely followed by West Palm Beach at 8.6 percent. Both cities saw the total number of homes sold surge by roughly 23 percent, making them the hottest real estate markets in the country.
San Francisco is experiencing yet another Big Tech-fueled spike, this time from the massive investment pouring into all things artificial intelligence. West Palm Beach’s boom is due to a migration of Big Finance to a town that just slapped Trump’s name on its airport. The arrival of Goldman Sachs and J.P. Morgan has led to the one-time hometown of Jeffrey Epstein now being referred to as “Wall Street South.” That sparked a 187% increase in the price of luxury homes over the last decade.
Meanwhile…
Monthly payments are too expensive for both first-time buyers and families looking to move up to a larger home, but wealthier buyers are in a much different position, with many being able to make large down payments or pay cash, making borrowing costs less of an issue.
Essentially, Americans clinging to the K’s leg are getting kicked to the curb by ultra-wealthy buyers who “can and are willing to spend more” … and that concentration of wealth led to “over one in five homes sold above the asking price in June.”
Lending Tree research released in June found that “fewer than 4 in 10 nonhomeowner households nationwide can afford a starter home.” And a Zillow analysis released in June found that a “record 242 U.S. cities now have entry-level homes priced at $1 million or more, nearly triple the count before the pandemic.”
That’s up from 80 cities in February 2020.
But that’s not all.
Coldwell Banker just released its “Global Luxury 2026 Mid-Year Report,” which found that the “widening liquidity line is splitting the luxury market.” And that means:
Ultra-high-net-worth buyers, insulated by cash and liquidity, are accelerating their real estate activity, particularly for single-family homes and unique properties, while buyers just below that threshold are pulling back, perhaps waiting for rate or economic clarity before committing.
Many of the ultra-wealthy buyers are pouring money into real estate as a “safe haven asset.” The ability to use real estate as a safe haven where the can park their wealth is itself a luxury most American cannot afford.
It’s hard to compete in a market with so much wealth, capital and liquidity in the hands of a small cadre of economic elites, as these datapoints from the Coldwell Banker report illustrate:
Almost two-thirds (63%) of Luxury Property Specialists say there is an increase in all-cash purchases among their luxury clients, up from 51% who said the same thing a year ago.
More than a quarter (25.5%) of Luxury Property Specialists identified the wealth divide as an active trend in their markets, up from 20.4% who said the same one year ago.
In May 2026, the top 5% of all luxury transactions accounted for nearly two-thirds (65.6%) of total dollar volume of homes sold in the single-family sector.
The top 1–5% bracket alone captured 42.8% of single-family dollar volume and 42.7% of attached properties, with both segments securing larger market shares than in 2025. This lopsided spending power is evident in the median sold price: the top 5% rose 8%, and the top 1% climbed 6.5%, while the top 10% trailed at 4.7% YOY.
The ultra-wealthy’s willingness to pay more for homes, for food, clothing and transportation is not only a hallmark of the K-shaped economy, it’s probably why inflation is so “sticky.” And it likely accounts for another K-shaped survey released this week by Lending Tree detailing Americans growing reliance on “Buy Now, Pay Later” (BNPL) lenders to buy daily necessities:
More than half of BNPL users say they wouldn’t be able to make ends meet without these loans. Among users, 54% agree that they need BNPL loans to make ends meet. Just 25% disagree. Among users most likely to say they need the loans to make ends meet: 62% of parents with kids younger than 18 and 59% of millennials.
Twice the rate of users have bought groceries with BNPL than two years ago. 29% of BNPL users say they’ve used the loans for groceries, up from 25% a year ago and 14% two years ago. 38% of Gen Z users have bought groceries with BNPL, as have 34% of users with kids younger than 18 and 33% of users who earn $100,000 or more. Only clothing, shoes and accessories (39%) and tech devices (34%) are more commonly bought via BNPL.
1 in 4 BNPL users have had three or more active BNPL loans at one time. That’s up slightly from 23% last year. Gen Zers (29%) and millennials (28%) are among the most likely users to say so. In addition, 68% of BNPL users agree that the loans cause them to overspend, and 54% of BNPL users say they’ve regretted buying with BNPL, including 18% who’ve regretted it multiple times.
Nearly half of buy now, pay later users say they’ve paid late on a BNPL loan in the past year. 47% of users say they’ve paid late in the past year, up from 41% in 2025 and 34% in 2024. (Another 15% say they’ve paid late before, but not in the past year.) However, 72% of late payers say their most recent late payment was no more than a week or so late.
Not coincidentally, another report—this time from the Federal Reserve Bank of Philadelphia—was touted by MarketWatch as a “glimmer of good news in the story of Americans’ whopping credit-card bill”:
A record percentage of credit-card accounts were fully paying off their balances each month during the first quarter of 2026, according to the Federal Reserve Bank of Philadelphia’s latest look at how households are using their credit cards.
Almost 37% of accounts (36.93%) were fully paying balances month to month, Philadelphia Fed researchers said Monday.
That sounds great … until you get into the details. One issue is the scope of the survey, which only included “credit-card data from big banks with at least $100 billion in total assets.” That excludes smaller banks, payday lenders and the “But Now, Pay Later” lenders who’ve seen their market grow from $116 billion in 2025 to $157 billion in 2025. No doubt, that number is only getting bigger in 2026.
Another key factor is, according to the Philadelphia Fed, wealth cardholders’ ability to accelerate their repayments to avoid the cost of higher interests rates. Basically, the people who can afford to pay more than the monthly minimum are doing just that … and, as MarketWatch also reported, that is likely distorting the picture of consumer debt repayments:
The Philadelphia Fed’s data appear to fit the theme of U.S. consumers splitting between those who are thriving and those are struggling, [said Grace Zwemmer, U.S. economist at Oxford Economics]. In recent years, fully paid balances have increased, as well as those only paying the minimum.
“That leaves the accounts in between — paying more than the minimum but not the full balance — as a shrinking share of the total, which could suggest the middle is thinning out rather than the typical cardholder simply doing better,” Zwemmer said.
Additionally, banks are likely “tightening their standards, which means more creditworthy accounts are getting counted while nonpaying accounts are charged off or slip into delinquency.” And that, in turn, could be adding to the reliance on BNPL loans for groceries.
It all adds-up to a K-shaped recovery that’s not only become a K-shaped economy, but is now hardening into a K-shaped society.
Ad Spend Data Reveals K-Shape To U.S. Ad Economy
https://www.mediapost.com/publications/article/416263/ad-spend-data-reveals-k-shape-to-us-ad-economy.html
Selling in a Bisected Economy
https://www.floorcoveringweekly.com/tise2026/topnews/selling-in-a-bisected-economy-46855
How to strategize with private label in a K-shaped economy
https://www.supermarketperimeter.com/articles/14341-how-to-strategize-with-private-label-in-a-k-shaped-economy
CoBank Quarterly Report: Inflation and High Costs Tighten Margins Across U.S. Agriculture and Food Sectors
https://www.oklahomafarmreport.com/2026/07/09/cobank-quarterly-report-inflation-and-high-costs-tighten-margins-across-u-s-agriculture-and-food-sectors/
Food inflation reshapes animal protein demand across markets
https://www.meatpoultry.com/articles/33772-food-inflation-reshapes-animal-protein-demand-across-markets
‘Biggest hunger crisis in a long time’: NC Food Bank triple match donations
https://abc11.com/post/food-bank-holds-triple-match-day-biggest-hunger-crisis-long-time/19476187/
Help Needed for 100,000 Ohioans Who Lost SNAP after Trump Cuts
https://columbusunderground.com/help-needed-for-100000-ohioans-who-lost-snap-after-trump-cuts-ocj1/
Thousands of Iowans lose food support under One Big Beautiful Bill
https://www.kcrg.com/2026/07/10/thousands-iowans-lose-food-support-under-one-big-beautiful-bill/
14K West Virginians have lost food assistance because of Big Beautiful Bill changes
https://westvirginiawatch.com/2026/07/06/15k-west-virginians-have-lost-food-assistance-benefits-because-of-big-beautiful-bill-changes/
Federal cuts to SNAP benefits causes uptick in food bank usage across central IL
https://www.wandtv.com/news/illinois/federal-cuts-to-snap-benefits-causes-uptick-in-food-bank-usage-across-central-il/article_215e3790-6c2a-4ff5-9457-b626cf723b32.html
Waiting for SNAP benefits, disabled 60-year old VB woman faces hunger
https://www.wavy.com/news/local-news/virginia-beach/waiting-for-snap-benefits-disabled-60-year-old-vb-woman-faces-hunger/
Military families still struggle with food insecurity, housing, and dwindling savings
https://www.wearethemighty.com/mighty-milspouse/food-insecurity-military-families-housing-savings/
1 in 5 moms are going hungry so their kids don’t have to
https://mother.ly/parenting/moms-food-insecurity-snap-no-kid-hungry/