The housing market is slowing down, and that's a bad sign for the economy


A number of key reports on housing data released in recent days are on a downward trend. Both existing and new home sales in the U.S. were down in June, and their previous month’s results were revised lowered. The lackluster sales data caused homebuilder confidence to plummet to its lowest level in 10 months Wednesday.

“The housing market has been losing momentum for several months,” said Stifel Chief Economist Lindsey Piegza, referring to a slump in housing starts, building permits, and sales during the second quarter. “Housing is a solid gauge of the overall health of the economy; weakness in housing raises a large red flag regarding the sustainability of domestic growth heading into the second half of the year.”

The U.S. Commerce Department said the sale of new U.S. single-family homes in June fell 5.3% to a seasonally adjusted rate of 631,000 — an eight-month low — and the previous month’s results were revised lower. While new home sales only account for 10% of the market, the latest existing home sales results weren’t any better.


I have sold my house so thankfully I don’t need to worry about going through a 3rd housing recession since 1987.


Other analysts have said there are other reasons for this downturn. One reason was the glut of houses are gone, which may drive the prices of houses up.



Having seen the headaches that come with sprawl and overdevelopment, they really need to quit using new housing starts as any sort of economic indicator.


I kinda feel their “own personal fortunes” are directly tied to being in power and that does require a recession that pushes the GOP out of control. The alternative is being unemployed and without access to campaign funds.


Housing goes in cycles. 8 to 10 years imo (anecdotally).

We’re overdue imo


It is too early to tell how my own personal fortune is going to do under Trump. My personal fortune did very well under Obama and I never supported Obama


If you haven’t seen an uptick yet, it seems your fortune is not residing in the stock market.


The question is not whether there is an uptick, but whether or not it will persist. During the first term of Bush people did well in the stock market. In the second term, not so well.


Normally when we don’t have summative data, we use what data we do have available. Per your approach nobody shall comment until Trump is out of office.


If I didn’t give Obama credit for the stock market why should I give Trump credit?


Yep. The latest housing bubble is going to pop. That will be bad for the economy. The pop would be good, long term, if the government would stop manipulating the economy so much.

This problem isn’t going away anytime soon. They made the ‘American Dream’ paying a bank for thirty years for an expensive home in the suburbs. This is incentivized by the home mortgage deduction, which is really just a big payoff to the banks.

Millennials don’t have this same dream. What will eventually fix this problem is their lack of interest. A significant percentage of the population don’t realize this. Those in charge probably do, but they’ll keep whipping this horse as long as the masses think this means something good.


Millennials and all people still need a roof over head, so if you have the type of house that somebody can rent in a location where people will want to rent, such as near a college, it will likely hold value. If you’re buying a megamcmansion in the burbs though, you’re up the creek.


Rental property near cities should actually increase in value. Houses in the suburbs will decrease. But, it is the middle age American worker bee who owns the houses in the suburbs. The government doesn’t want to tick him off too bad.


The housing market is sometimes an indicator of inflation and it often subject to “bubbles”. I’m not sure this is a bad sign.

It is interesting locally, though. I don’t know if it is the case anywhere else, but the “McMansions” are not selling well. Around here, that’s $300,000 or above. There is definitely a market under $200,000. That would be a 2,000 s.f. house or a little larger. What has really taken off is small acreage within easy driving distance of a town where there’s a lot of employment. The pinnacle is a small country acreage with live water; say 20 acres or more on a creek or spring. You’ll pay a lot for that if you can find one for sale at all.

So I guess it depends.


Who said anything about giving him credit? “Under Trump” or “Under Obama” simply refers to the era of their presidency.


We are north of Boston and here the market is great. We moved to Salem because it was the closest to Boston we could afford a singe family. We made the move right in time because there are very few, of any, single families for $300,000 and less in this area. They go very quick.

There seems to be an exodus of folks looking to start families that still want to work in the city. Real estate in Boston and nearby cities is insane. You pretty much need cash in hand.


That sounds more like an inventory shortage than a market slowing down.


It’s not slowing down, it’s steadily increasing. There is a shortage but it’s due to demand.

I think this area may be a special case though. There are a lot of wealthy towns up here and the poorer towns are becoming more wealthy as more people move in.

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