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‘Tumbling Down’: Pending Home Sales Plunge, Mortgage Activity Evaporates
Another day, another dour read (or two) on the US housing market.
Pending home sales tumbled in Jun
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Bezos & Co. are buying single family homes, to rent.
Bezos also feeds you, of course (Whole Foods and Amazon Fresh). Coincidentally, yesterday he put in a $4 billion bid to buy One Medical, so he wants to be a channel for your doctor and all of your medical supplies. The little bald guy wants to be an insidious presence in our lives. He’s quirky that way, I think. And it’s profitable too, of course. The next thing you know he’ll be placing staff in our homes to keep toilet paper stocked and assist us in getting in and out of our baths.
In my city, the lines to get into existing SFR open houses have dried up. Realtors sitting there twiddling thumbs. There’s still plenty of desire to buy, but fewer have the means and others are waiting for lower prices. New home development isn’t much of a factor here.
Meanwhile, INVH rent growth YOY still DD% in 2Q, looks to have accelerated a little from 1Q. Apartment REITs reporting DD% rent YOY for latest month. Good times for institutional landlording.
You can have a planned economy with little freedom or the economic oscillations of capitalistic democracies. I think we in the States are supposed to be the latter and what we are experiencing is what we signed up for.
Demand will be scant through the end of the year as rates stay high and people try to wait out them out. Builders will stop building and the long-term housing shortage will continue unabated.
In a year or two when mortgage rates come back down, all those folks who were waiting on the sideline as well as new buyers that want to settle down will all try to jump back in, but they’ll find that the market has passed them by.
The fed will win the battle against housing prices in the near term, but if new supply dries up now, the fed will lose the housing war.