Look Out Below

Ouch


Not good


Worse than the height of the pandemic

Home sales are falling off a cliff, again, just 14 years since the last real-estate crash:

“Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession,” said National Association of Home Builders Chief Economist Robert Dietz.

The confidence of builders of single-family houses, after the second-biggest plunge in the data last month, fell again in August, the eighth month in a row of declines, having gone downhill every month this year, “as elevated interest rates, ongoing supply chain problems, and high home prices continue to exacerbate housing affordability challenges,” according to the NAHB.

………

Homebuilders cut prices to prop up s

ales and limit cancellations: 19% of the builders said they cut prices over the past month to “increase sales or limit cancellations,” the NAHB said. This was up from 13% of the builders who’d reported having cut prices in the prior month.

In terms of cancellations: Based on data from John Burns Real Estate Consulting, the cancellation rate homebuilders experienced in July, despite their efforts to limit them by cutting prices, spiked to 17.6%, out-spiking lockdown April 2020:

The most alarming bid of all of this is that it is shaping up as a repeat of 2008, and that was just 14 years ago.

To quote (not) Talleyrand, "It is worse than a crime, it is a mistake."