Sunday, September 2, 2018

Housing Bubble Report for August shows every indicator on the downslope

With almost every housing indicator but price falling for the 2nd month in a row, we wanted to take a look and provide an outlook for what could potentially be the signal that the bursting of the Housing Bubble 2.0 is upon us.


Existing home sales for July 2018:
This morning's release of the July Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.34 million units. The Investing.com consensus was for 5.44 million. The latest number represents a 0.7% decrease from the previous month and a 1.5% decrease year-over-year. – Advisor Perspectives
Pending home sales for July 2018:
Lawrence Yun, NAR chief economist, says the housing market’s summer slowdown continued in July. “Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” he said. “It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.” 
The MoM came in at -0.3%, down from a 1.0% increase last month. Investing.com had a forecast of 0.3%. – Advisor Perspectives
New home sales for July 2018:
This morning's release of the July New Home Sales from the Census Bureau came in at 627K, down 1.7% month-over-month from a revised 638K in June. The Investing.com forecast was for 643K. – Advisor Perspectives
Mortgage applications for July 2018:
Mortgage applications fell last week for the sixth time in seven weeks despite lower rates, the Mortgage Bankers Association (MBA) reported. 
For the week ending Aug. 24, MBA’s adjusted composite index declined by 1.7 percent from the prior week. Refinance activity fell 3 percent, while the adjusted purchase index declined by 1 percent. The refinance share of mortgage activity was unchanged at 38.7 percent. – Scotsman Guide
Case-Schiller home price index for July 2018:
Home sales, mortgage apps, starts, permits, buying sentiment, and now home prices...all disappointing expectations and sliding. 
S&P CoreLogic (Case-Shiller) 20-City home price index rose just 0.11% MoM (half the expected 0.2% rise) and slowed to a 6.31% YoY gain - the weakest since Dec 2017 - Zerohedge
With the Fed expected to raise interest rates in both September and December of 2018, and perhaps even three more times in 2019, the outlook for housing should continue to decline.  And we will be conducting this report each month going forward with the prospect that the bursting of the 2nd Fed driven housing bubble appears likely to be underway. 

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