Yes, I’ve been watching them for a while now. They’ve been doing horribly, having fallen out of bed about the same time as the small caps.
While the homebubblers did bounce a bit yesterday, now that’s looking sickly and weak again.
As goes housing…so goes the US economy. Or at least it used to before everything ran on Netflix and chill, or whatever.
The causes are these:
- Home sales volume remains very weak
- Rising mortgage rates are becoming a real problem
- Sales volume is dropping
- Home affordability is dropping
Just for fun, here’s another related indicator….lumber.
Lumber started sneaking out the back door this past spring, after a remarkable run higher. That all might have had a lot to do with looming trade sanctions and specualtive front-running, but it’s down by 50% from that recent peak, which is a lot for any market under any circumstances.
Add it all up, and Doug Duncan’s call (the chief economist of Fannie Mae) of a recession kicking off in early 2019 seems to be gaining traction here.
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