The discrepancy between housing starts and completions is the largest since 1980. Let’s discuss.
The DotCom bust was unrelated to housing. Most recessions impact housing or housing busts lead to recession.
The single-family stats aren’t good, but they aren’t as bad.
Single Family Housing Starts Minus Completions
The next chart puts the discrepancy into proper perspective.
Housing Starts and Completions
Housing Starts Minus Completions Detail
The Strong Economy?
Fed Chair Jerome Powell put on a strong display during the FOMC press conference.
But if the economy was as strong as Powell let on, the Fed arguably should have not cut rates at all.
On September 19, I noted Existing Home Sales Decline for the 24th Time in 31 Months
From a year ago sales are down 2.5 percent. Sales are down 39 percent from the January 2022 high.
The Ominous Reason Continued Unemployment Claims Have Improved
Also, please note The Ominous Reason Continued Unemployment Claims Have Improved
The brief synopsis is unemployment benefits are expiring rapidly.
Hey Mish,
How have the recent upward revisions to GDI affected your slowing economy/recession call? I read they ended up being not much different than GDP for all those months/quarters after all.
To be clear, the GDP and GDI data for the 2 most recent quarters – those of greatest interest to MIsh’s Recession Call – haven’t “ended up” yet, there are more revisions ahead.
The housing market is the last bastion of the pandemic craziness. For the last 3 years everyone has spouted “there’s a housing shortage!”. But, where was that shortage for the 5 years previous to the pandemic? Prices in my market (Greater Houston) were flat to down from 2015 until the beginning of the pandemic.
As soon as mortgage rates come down enough (say below 6 percent, maybe, or, even better in the low 5’s), many, many homeowners will be willing to sell again, as their “lock in” affect will diminish. When that inventory comes to market, buyers will have more choices, yet prices shouldn’t rise, even with the lower rates spurring demand, because of that increased inventory.
Most other assets and commodities have already come back in line with their pre-pandemic trends (foodstuffs, oil, lumber, etc). Housing hasn’t returned for the most part, because of rates, and the lock in affect, that has been caused by the quick drop and rates, and subsequent quick rise.
Homebuilders have made a killing on this, but, that gravy train will end, if mortgage rates get back down to the low 5 percent range.
“Smoke and Mirrors.” An age-old Phrase that still applies when it was first used in reference to Politics with a minor revision then used by Jimmy Breslin in 1975:
“All political power is primarily an illusion… Mirrors and blue smoke, beautiful blue smoke rolling over the surface of highly polished mirrors… If somebody tells you how to look, there can be seen in the smoke great, magnificent shapes, castles and kingdoms, and maybe they can be yours.”
The port strike is on like Donkey Kong! I love the smell of profits in the morning!
If inflation spikes, will the fed do any more cuts this year? I am expecting a market horror Halloween this year! Ride the volatility to riches guys! Money train is pulling in right now.
The fed will need to increase rates as inflation will rise.
I think we’re at the inflection point where the FED has to let inflation run, as it was inevitable when they lowered rates too much and funded massive government overspending; the trap is shut.
Yes, the Mini S&P chart is quite scary!
it’s 1970s style stagflation……..with assasination attempts, strikes and domestic bombings picking up. got bell bottoms?
70s had gas lines, gas shortages, Swine Flu…the blob/deep state is a One trick pony. LOL
I was politically a beginner “thinker” back then but WE STILL went to the Palo Alto Lytton Plaza Viet Nam Anti-war demostrations.
I STILL voted. It then took 54 years to come to the conclusion that it is ALL smoke and mirrors. ALL of it.
i figured out it was all BS uniparty grifters pre teen……..and by college it was literally a joke. we LOL when raygun was shot. had a fun party that evening too………in 70s as a teen i sold beer and soda on gas lines in queens…….i still remember how great we much we charged. 10x on the soda. 20x on the beer costs. hell, the NYPD fuzz even bought beers from us……….bravo mayor adams, you dumphuck. gonna make 2025 entertaining to watch.
If anyone is still voting in Federal elections it means they have not been paying attention.
Clearly Biden / Harris / Walz need to increase the surge of illegal immigration further to put more pressure on housing demand to get those completions rolling in. Printing press go brrrrrrrr. All is well.
we need to bring in more mexicans and chinese to help mein fuhrer dumpy to round up the millions of “illegals”.
No prob. Plenty of room for the poor migrants in Boston, New York, Philly, NoVa, Chicago – esp their burbs, the bus stops are “in this house we believe…”
we need more cheap labor………thanks for thinking of us
That’s Pelosi. She calls them crop pickers. Everyone knows the racists are the Democrats.
The California way. 50 years of unchecked illegals here. Look at an electoral map of the US in 1980; then look at 2020. Virtually the only blue in 1980 was around San Francisco in California. It was Reagan Country. Now, not quite half the State is blue. Good news – we did start to flip back red with this last Primary. People are waking up and are fed up.
CA went from red to blue to brown, the color of, well, you know. Those who haven’t left are either too drugged out to care or too clueless to recognize the massive decline. Left nearly 20 years and it’s gotten worse every single day since then. The rich don’t care, they exploit the soft slavery coming from the south and make the middle class pay for it. It’s a third world country with insane taxes and a low quality of life.
With this and add auto sales to the mix
The 2 biggest markets we are in a deep
Recession
Nothing a few tariffs can’t fix.
lets look a bit deeper
https://calculatedrisk.substack.com/p/final-look-at-local-housing-markets-b07
Don’t worry as powell has your back. Everything will be fine as the fed has tamed inflation and the “soft” landing is firmly in place. More fed cuts to come. What could possibly go wrong?
I soooo want to believe.
NOT!