Today’s podcast covers a possible soft landing in housing and the likelihood that we won’t see a 2002-2011 credit crisis because we never had a credit housing boom in the first place. As always, the biggest thing I have seen missed this century in housing economics is understanding what credit profile risk looks like and the dangers of residential lending. During the previous expansion, part of my housing work was that we would have the weakest recovery ever based on one factor: lending is back to normal, which is a good thing, not a bad thing. While demand wasn’t booming in the previous expansion, homeowners’ quality was being set in stone in a very positive way. Today’s podcast discusses the likelihood that more and more housing crash addicts will promote 2008 foreclosure crisis marketing gimmicks as they have done for over ten years.
Make no mistake; housing is in a recession now. The builders are done building at the growth rate we saw before. Total activity in sales is falling, which means less transfer of commissions in the existing home sales market, and unlike the general economy, the housing industry is losing jobs.
Builders confidence index breaking below 50 today. I raised the 5th recession red flag in June, article below.
However, this doesn’t make it 2002-2011 again. We have to evolve our housing discussion from panic-driven headlines about massive home price crashes. I mean, it’s almost September 2022, and inventory levels are still struggling to get back to 2019 levels this year. I am not talking about the 2007, 2011, and 2015 levels but 2019. This is why so much of my work recently has been that I will remove the savagely unhealthy housing market theme once we can get total inventory back to 2019 levels which means we touch 1.93 million. Then, we have enough supply to have a more functioning housing market.
NAR: Total Inventory levels going back to 1982
Currently at 1,260,000
2007 peak roughly at 4,000,000
Purchase application data is already below 2008 levels as well.
I am no longer writing for my blog; all my work can be found at HousingWire; you can use my LoganVIP50 code to join HousingWire Plus. Also, I can’t join Twitter Spaces, a podcast, or an interview unless it goes through Press@HWMedia.com first.
I recently wrote about the inventory situaiton and how new listing data is falling now. I talk about it with many charts to show the udpdated housing inventory, inflation, and purchase application data.
“We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.” Franklin D. Roosevelt
Logan Mohtashami is a Lead Analyst for Housing Wire, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, spends his days and nights looking at charts and nothing else