Today’s report on existing home sales was a market mover to say the least. The reduced volume in sales is an indication that at current prices the market for existing homes is not clearing. That is coming on the heels of record-low mortgage interest rates. While it is interesting to look at the gruesome details of the latest report, it is in our opinion more interesting to take a look at the longer term picture for the housing market.
There are two big issues out there for the housing market and the economy. The first is that the housing prices may still have room to fall. The second is whether the vast array of programs designed to cushion the blow of lower home prices is in fact preventing the US economy from finding some sort of stable ground.
Posts mentioned in the above screencast:
Existing home sales lowest since 1996. (Calculated Risk)
An awfully bad number. (Bespoke)
America stops buying homes. (Felix Salmon)
Homes are not a way to build wealth. (Megan McArdle)
Supply remains a problem. (Points and Figures)
Home prices are still (too) high. (Planet Money)
Maybe the recession never really ended. (Daniel Indiviglio)
$XHB in the green. (Bill Luby)
Daily price chart of SPDR S&P Homebuilders ETF. (Finviz)