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New US Home Sales Plunge, Inventory Piles Skyward
New home sales ran at a slower-than-expected pace in the US last month, disappointing government dat
H-Man, a rather simple solution – lower the price of the homes via no buyer interest or inability to own at the current level. Probably a lot of home buyers in the $200K to $300K range but that means the current inventory has to be written way down. There were buyers in 2009 that did exactly that and the number of homeowner’s today who are old, may not see the equity they think is there since they have to cash out.
We’ve been watching the housing market freeze over for some years it seems.
To GFC veterans, a sputtering housing market is an alarming thing. So much of the economy revolves around housing – it’s purchase, financing, furnishing, remodeling, leveraging, sale, etc. I mean, houses are the biggest asset class in the US (I think that’s right?) So cue the bears.
Yet to date, nothing much bad has resulted, unless one is (used to be) a real estate agent or mortgage banker.
Or a frozen-out first-time homebuyer, but as we’ve reminded ourselves in another thread, there is badness, and there is badness that hurts markets.
(Anyway, don’t they stereotypically just go have more “experiences” with avocado toast in their carefree renter lifestyles?)
I think the parade of horribles doesn’t start goose-stepping until and unless House Prices Fall Significantly.
I also think we are on the cusp of seeing that start. Ref inventory, affordability, aging, rates, and the increasing percent of metros rolling over on price. I’ve been positive on house prices for years; no longer. I also think we’ll find the housing cycle’s impact on the economy did not somehow go away.
A couple hundred bp decline in 10Y rates could, probably would, push out the housing bear market. An ill-conceived privatization of FNM/FRE could pull it in.
Hi John,
This calumny cannot stand!
My carefree renter lifestyle eschews avocado toast in all its varieties. Such trifles are beneath all but the lowest echelon of carefree renter. Tonight, for instance, I was engaged in determining if the ice sheen on my shaken martini could be preserved in the freezer whilst its cloudiness resolved as I skewered three blue cheese olives. The crystal clear martini with little icebergs floating across it that resulted can only be accounted a success.
As Marlin Perkins fervently wished Jim success in the swamp, so I raise my martini to the prospects of your house projects this summer.