It’s no secret that housing is going through a rough patch this year. Whether you’re looking at lagging economic indicators, leading indicators, or homebuilders and related stocks, they’re all pointing in the same direction…down. 📉
Today the S&P Case-Shiller Index showed that national home prices cooled in July at the fastest rate in the index’s history. While prices are still higher than a year ago, price gains decelerated significantly MoM. In June, prices were 18.1% above the previous year, while in July, they were *only* up 15.8% YoY. 😮
While new home sales bounced back in August, experts say the improvement is likely temporary, caused by the dip in interest rates earlier in the summer. Since mortgages can take up to 90 days to close, many sales from May/June/July were officially recorded in August. 🗓️
Many analysts expect the weakness to continue as we head into a seasonally soft period for housing. Combine that with rates hitting their highest levels since the early 2000s, and you get a very weak demand side of the equation.
They say, “don’t fight the Fed,” and it’s waging war on housing (and employment) right now. So while we’re sure Fed officials see today’s number as progress, they still have a long way to go. In other words, the pain for housing may be just beginning. 🛣️
