Wednesday, October 29, 2014

Housing Market Chart Porn

Presented with little comment. After all, what is there to say about the "housing recovery" over the past six years when the volume of applications for home purchases is the lowest since August 1995? Add to this the fact that the all-cash buyers (AKA hedge funds) have dried up. 
Keep believing that lower rates will support home prices. Keep believing the Fed's QE infinity is working. Alternatively, we could all face the facts that this is not your mother's housing market anymore. 
Charts courtesy of Bloomberg.

The long term: Six years of recovery?


The long term:

This is called a broken transmission channel. Every artificial spike in the homebuilder stocks is a chance to add to short positions.
















3 comments:

  1. Does that chart include refi's? There was a heck of a lot of refinancing going on as rates plummeted during the bubble. Eye opening chart either way though.

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    1. It doesn't include refis, but those have dried up as well as we've reached the limits of low interest rates. The fall in mortgage applications hits the home builders particularly hard since in excess of 95% of new homes are purchased with a mortgage. The Fed's FRED datebase is also a good resource to check out.

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  2. Forgot to add. I spent years hiking the length of the Green Mountain Trail. VT hiking is incredible!

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