We are seeing mean reversion in home prices in red cities and blue cities.
The price of homes in America’s to 20 cities rose just 0.16% MoM in January (the lowest MoM rise since August and well below the 0.35% MoM expected.
Source: Bloomberg
Home prices rose 0.9% YoY as mortgage rates have fallen. Home prices are still too high.
New York leads with a 4.9% annual gain, followed by Chicago at 4.6% and Cleveland at 3.6%, while Tampa fell 2.5%…
Don’t be confused. This isn’t leftists running to blue cities. It is mean reversion. The prior fleeing blue cities to red cities created a mean reversion effect where red cities home prices rose too fast and blue cities fell too fast.
Nothing has been the same in the US housing market since the Covid outbreak of 2020. According to Redfin, there are nearly 50% more home sellers than buyers.
And the number of homebuyers has fallen to historic lows.
A good reason there are so few buyers is that home prices has soared after the Federal government’s spending spree after Covid.
Prayers for the soul of Noelia Castillo Ramos, murdered by the Spanish government. For being gangrape TWICE by immigrants then attempted suicide.
Despite falling mortgage rates, analysts expected December’s drop in new home sales to accelerate in January… and accelerate they did… crashing a stunning 17.6% MoM (-2.7% MoM exp) – the biggest MoM drop since July 2013.
This huge MoM drop dragged sales down 11.3% YoY – the worst slide in three years.
Source: Bloomberg
This huge drop dragged the new home sales SAAR down to its lowest since 2022, catching down to existing and pending sales…
Inventories are up (Houses for sale in Jan. rose 0.4% m/m to 476,000), prices are down (Median down 6.8% YoY at $400k – lowest since 2024)…
…and remember these deals were signed in January – meaning this is not mortgage related (some suggesting weather impact – Northeast sales down 44.7% MoM, MidWest -33.9% MoM, but the scale is immense).
Moral of the story: US home prices are too high for millions of households to afford.
Producer prices were higher by 3.4% YoY (notably hitter than the 3.0% expected and up from the 2.9% prior). That is the hottest PPI since January 2025
Source: Bloomberg
More than half of the February rise in prices for final demand can be attributed to a 0.5-percent advance in the index for final demand services. Prices for final demand goods increased 1.1 percent.
Core PPI (ex Food and Energy) also soared (+0.5% MoM) pushing core prices up by 3.9% YoY – the highest since Jan 2025.
Delistings soared in 2025 after sellers began to outnumber buyers, and decided to take their homes off the market to take another bite at the apple this spring. Overall delistings hit a record high of 112,788 in December, while relistings this year represented 3.6% of all homes on the market.
Supply gains have been concentrated in the South and West, particularly among homes priced under $500,000. While the Northeast and Midwest have seen some growth, they are still lagging behind the other regions.
As of February, active listings climbed by 7.9 percent year over year, reaching 914,860 homes across the nation for sale. A little more than 7 percent of those listings resulted in contract cancellations—down slightly from the same time in 2025.
An analysis of the country’s 50 largest markets showed sharp increases in inventory in Seattle, with a 38.5 percent hike, as well as Louisville, Kentucky, 27.3 percent higher, and San Jose, with nearly 25 percent more homes on the market.
On the other side, Hartford, Connecticut, experienced the deepest drop in inventory at over 82 percent, as well as Providence, Rhode Island, at 61.1 percent.
Overall, homes spent a median of 70 days on the market in February, four days longer than a year earlier.
Underlying U.S. inflation increased more than expected in December, and signs are pointing to a further acceleration in January, which would strengthen expectations that the Federal Reserve would not cut interest rates before June.
The personal consumption expenditures price index, excluding the volatile food and energy components, rose 0.4% after an unrevised 0.2% gain in November, the Commerce Department’s Bureau of Economic Analysis said on Friday. In the 12 months through December, core PCE inflation advanced 3.0% after increasing 2.8% in November.
The PCE price index increased 0.4% in December after rising 0.2% in November. PCE inflation increased 2.9% year-on-year after gaining 2.8% in November.
But in terms of contributions to the 0.4% figure is that durable goods rose 2.051%.
The Fed has been printing money (M2) like there is no tomorrow. With M2 growing at 4.6% YoY in December.
Unfortunately, US pending home sales have collapsed to the lowest level since at least 2001. Nothing has been the same since Biden/Harris administration.
Mortgage rates are still too high by historic standards.
Speaking of Democrats running the economy, New York’s mayor Zoran Mandami (the Ugandan Communist) is seeking to raise property taxes to 9.5% which will hit EVERY New Yorker, not just the billionaires he allegedly wants to tax.
So much for the leftist fearmongers claiming that Trump Tariffs will kill US manufacturing, In January, US industrial production rose 0.7% MoM. And 2.28% YoY.
Capacity utililzation rose in January to 76.22%.
Pass the Save Act and don’t listen to leftist propaganda that women won’t be allowed to vote. Then get a passport and show that.
Confounded Interest - Anthony B. Sanders 
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