Here are three takeaways from the recent National Rental Home Council Industry Leaders Conference, where our CEO John Burns was a featured speaker.
After February’s surprise surge in Housing Starts and Permits, driven largely by a brief dip in mortgage rates, the housing market’s data was expected to slide significantly in March data released today… and they did. However, while housing starts fell, it was less than expected (-0.5% MoM vs -3.5% exp but Feb’s 9.8% jump was revised down to +7.3%) but Building Permits plunged 8.8% MoM (vs 6.5% MoM drop) and Feb’s data was revised higherto 15.8% (from 13.8% MoM)…
As mortgage rates have risen this year, the buyer demand for homes has fallen. That has spelled trouble for the home construction business. Homebuilder confidence dropped for the tenth straight month in October. The decline in builder sentiment reflects what economist Ian Shepherdson describes as “housing … in free fall.
The U.S. housing market is absolutely imploding, but nobody should be surprised. In fact, we were warned way ahead of time that this would happen. When the Federal Reserve told us that they would be aggressively raising interest rates, we all knew what this would do to the housing bubble. It was obvious that home prices would fall, home sales would plummet and home builders would get absolutely crushed. Sadly, that is precisely what we are witnessing. But instead of reversing course after witnessing all the damage that they have caused, Fed officials are insisting that even more rate hikes are necessary. So as bad as things are right now, the truth is that they are going to get even worse in the months ahead.