Skip to main content

Is the Housing Market Weakening? Or Not?

GUESS IT DEPENDS ON YOUR SOURCE OF INFORMATION

I wrote back in September of last year that I thought that the housing market was showing signs of weakness. This is important because it is a large part of our overall economic outlook. But there are currently differing opinions, depending on the source.

From the American Institute of Economic Research on May 23: Housing Outlook Remains Weak
Sales of new single-family homes fell 6.9 percent in April to a seasonally adjusted annual rate of 673,000, down from a multiyear high of 723,000 in March.
Sales fell in three of the four regions, with only the Northeast - the smallest region by volume - posting a gain.

Total inventory of new single-family homes for sale fell 0.9 percent to 332,000 in April, pushing the month's supply to 5.9 months, up from 5.6 months in March.

Slowing sales and rising inventory are coinciding with slowing permit issuance.

Overall, despite weakness in housing, the economy continues to be supported by a tight labor market, rising incomes, solid balance sheets, and reasonably high levels of consumer confidence. The main risks on the horizon are the fallout from escalating trade wars and uncertainty about global economic conditions.
Read the entire article

From Forbes, May 23, 2019.
The U.S. housing market is healthy. The important indicators confirm it, so we can ignore the negative reports that use existing home sales data.

What about a recession? Could one negatively affect the housing market? Of course, because it would adversely affect employment, thereby raising personal income concerns. Such a scenario is not yet indicated.

Read the entire article

From Seeking Alpha: Housing Collapse 2.0 Continues As Predicted, May 23
For several months, it was mostly just sales that were down. As I said at the time, it would take a while for prices to follow because sellers are highly resistant to dropping the value of their number one asset; so, the squeeze needs to be on for a while for median prices or average prices to fall. Well, the squeeze has been on long enough, and sellers are starting to capitulate to the long drop in demand. 

Prices are falling.
There are other parts of the country where prices are going up, of course, but overall, the trend is down for sales and starting to move down now for prices. Prices had risen in most parts of the country to the same housing bubble heights of the last time around.

Read the entire article.
My take:
From everything's rosy, to gloom and doom. What are we to think? But it pays to watch these markets because they are indicators of where the economy is headed. While new home sales fell in April, I'm not seeing all the gloom and doom yet.

The housing market where I live in Austin remains strong, but is becoming expensive. It pays to be aware of trends. I don't see a bubble and collapse, but anything can happen. I have five percent of my portfolio in real estate, so my exposure is limited. And watch stocks like Home Depot and Lowe's. They can be an indicator also.

This chart is not pointing to a gloom and doom scenario -- yet.


Comments

Post a Comment

Popular posts from this blog

The Hidden Agenda Behind the Global Warming Hysteria

Climate change activists are not just interested in reducing carbon emissions in order to "save the planet." Their underlying desire is to overturn capitalism and replace it with socialist governments worldwide. 

Our story starts with the IPCC, or the Intergovernmental Panel on Climate Change, a U.N. organization. "And any settlement of the Global Warming issue by the UN would entail massive transfers of wealth from the citizens of wealthy countries to the politicians and bureaucrats of the poorer countries." (1)

In 1992, at the first U.N. Earth Climate Summit in Rio de Janeiro, Brazil, Program Executive Director Maurice Strong stated, very candidly: 

"We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?" (2)

Former U.S. Senator Timothy Wirth (D-CO), then representing the Clinton Administration as U.S. undersecretary of state for global issues, join…

IRA Taxes: Rules to Know and Understand

Article from schwab.com


Individual Retirement Accounts (IRAs) can be a great way to save for retirement because of the tax benefits they can provide. If you’re eligible, you can choose a traditional IRA for an up-front tax deduction and defer paying taxes until you take withdrawals in the future. Or, if eligible, you might opt for a Roth IRA and contribute after-tax money in exchange for tax-free distributions down the road.


So, what's the catch? There are a few. If you run afoul of some of the IRS rules surrounding these accounts, the penalties can be quite stiff—all the way up to a disqualification and taxation of your entire account.

Ignorance of the law is no excuse, and with few exceptions, the IRS isn’t very forgiving of mistakes. Knowing the rules can help you navigate the many potential IRA tax traps you might encounter on your way to retirement.

Keep in mind that when we discuss taxes and penalties, we’re referring to those at the federal level. In most states, you will also…

Critical Financial Steps When Buying a Home

In my lifetime, I have bought six houses, and sold five. I currently live in the sixth, which was new construction, which was an adventure unlike purchasing an existing home, But the principles of buying a home are the same, whether you are purchasing a new home, or an existing home.

1. Understand why you want to buy a house
Purchasing a home is a major decision that shouldn’t be taken lightly. It’s important to define your personal and financial goals before proceeding. Think about factors such as whether you’re craving more stability, whether it makes sense financially and whether you’re prepared for the responsibility of maintaining a home.

You should explore some resources on Renting vs. Buying before you make the decision. I posted a article with a couple of good videos on this subject, and bankrate.com as an informative article here
2. Dig Into Your Credit Reports and Credit Scores Your credit score and history are the first things all lenders will look at to decide whether or …