- by New Deal democrat
First of all, my extended take on yesterday's report on August housing permits and starts, "The most important single housing report in the last 7 years," is up at Seeking Alpha.
While housing starts remain in a weak uptrend, I have downgraded housing permits overall to neutral, and single family permits to a slight negative.
This morning's report on existing home sales for August just adds more confirmation that housing is at very least plateauing.
While month over month sales were unchanged, they were tied for a 12 month low. Further, existing home sales have not made a new monthly high since last November, 9 months ago. The 3 month average has not made a meaningful new high since April of last year.
The median price of an existing home, at $264,800, continues to outpace wage growth, up 4.6% YoY, and a slight YoY% increase from last month.
(The NAR is picky about other sites posting graphs of their statistics, but if you want to see graphs of the above information, they are at this link on the NAR site.)
The recent further increase in mortgage rates is also only going to put more pressure on housing.
This quote from this morning's report sums up the situation pretty well:
“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said [NAR spokesman Lawrence] Yun. “Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”Unless next week's new home sales report contains an unexpected positive surprise, the rating on the overall housing market is a slight negative, meaning downward pressure on the overall economy beginning next summer.
