Smash Burgers

Existing home sales held up better than expected last month in the US, but nevertheless notched a third straight decline.

That was one takeaway from the last of this week’s macro data out of the world’s largest economy.

Sales slipped 0.7% MoM, better than the 1.2% drop consensus expected, but the pace remains lackluster.

May’s decline was the 23rd in 28 months on NAR’s series.

You know the story: There’s not enough inventory. There was some good news on that front, though. Total housing inventory rose almost 7% MoM and nearly 19% YoY in May, according to the NAR release. Months’ supply was 3.7, better than the 3.1 observed during the same month in 2023.

NAR chief economist Lawrence Yun suggested the market may be turning a corner. “Eventually, more inventory will help boost home sales and tame home price gains,” he said Friday.

Yes, “eventually.” But not right now. Because the median price hit a new all-time record in May (i.e., not just a record for May, but a record for any month) at $419,300.

Prices have now posted 11 straight YoY gains. The 5.8% 12-month advance in May was the swiftest since annual increases resumed in July of 2023.

This is plainly ridiculous. The price trajectory, I mean. I try to remind myself of that at regular intervals. Of how absurd this looks to regular people. I advise readers to do the same: Be thankful if this isn’t a concern for you.

I visited an old friend last week for dinner. He recently moved into a neighborhood full of houses I’d describe as “barely passable.” You know the ones I mean. There’s no brick and no stone. The nicer ones have Hardie board, but there’s a lot of vinyl siding. Inside, the living area, the kitchen and the dining room (such as it is) has LVP, but go upstairs and it’s all carpet. They’re new homes, but in this case that’s not a compliment.

“Look at this.” He handed me his phone. We were out back on a small deck. He was making smash burgers on a Blackstone. On the screen was the listing for the house. Drumroll: $420,000. “This ain’t a $420,000 home,” he chuckled. I didn’t know what to say. “It’s a $250,000 home,” he went on. I nodded. He clearly got the joke, so I felt like I could safely agree without insulting him. “Yeah.”

He made $118,000 last year, by his own account. His wife made $40,000. There was a time, not so long ago, when they could’ve afforded a much nicer home. Alas.

The NAR’s Yun tried to stay upbeat. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions,” he said, before conceding the unavoidable: “The mortgage payment for a typical home today is more than double that of homes purchased before 2020.” That means folks like my old friend are railroaded into homes they never would’ve settled for as recently as 2019.

The smash burgers were good. I’d never heard of smash burgers until this month. My friend grilled them with butter. Lots of butter. An obscene amount of butter. When they were almost done, he put half a dozen eggs on the grill beside them. “What are the eggs for?” I wondered. “The burgers, C! You gotta have a fried egg on your burger!”

I’ve eaten my share of $500 meals over the past decade. Those $5 egg smash burgers were the most decadent dinner I’ve enjoyed in a very long time.