Three weeks ago, we showed readers what happens when the infamous “Bullwhip effect” reversal takes place by presenting the unprecedented surge in the “Inventory to Sales” ratio for a broad range of US retailers covering the furniture, home furnishings and appliances, building materials and garden equipment, and a category known as “other general merchandise,” which includes Walmart and Target. Since then, this ratio has only gotten even more extended, and as shown below it is now at the highest level since the bursting of the dot com bubble!
A little over a month ago, when mortgage rates were still “only” 5% we shared several devastating anecdotes from real estate agents and industry execs who validated our worst fears: US housing was imploding… fast, with subsequent observations only confirming this dire conclusion about the state of the most popular asset class among the US middle class.
Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,549,000. This is 14.4 percent below the revised April estimate of 1,810,000 and is 3.5 percent below the May 2021 rate of 1,605,000. Single‐family housing starts in May were at a rate of 1,051,000; this is 9.2 percent below the revised April figure of 1,157,000. The May rate for units in buildings with five units or more was 469,000.
Amid surging layoffs in the real estate market, slumping homebuilder sentiment, soaring rates and plunging mortgage applications, it is no surprise that analysts expected a drop in Housing Starts and Permits in May (-1.8% MoM and -2.5% MoM respectively). Those numbers were destroyed as Housing Starts crashed 14.4% MoM and Permits plunged 7.0% MoM…
ATTOM, a leading curator of real estate data nationwide for land and property data, today released its May 2022 U.S. Foreclosure Market Report, which shows there were a total of 30,881 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 1 percent from a month ago but up 185 percent from a year ago.
Despite the Fed’s most aggressive interest rate hike since 2000, consumer prices continued to surge in May, adding to fears that inflation may be out of control. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) increased 8.6 percent over the last 12 months before seasonal adjustment, the highest reading since December 1981.