US Existing Home Sales rose for the third straight month in December (longest streak since late 2021), rising 2.2% MoM and up 9.3% YoY – the best annual shift since June 2021. However, despite the last rebound, for all of 2024, sales reached the lowest since 1995, when the US had about 70 million fewer people.
And with the lowest existing home sales since 1995, we have mortgage purchase applications at the lowest level since 1995.
Why? The median price of EHS has exploded under Biden.
Mortgage rates are hovering around 7%, same as around 1995.
The Visual Capitalist calls most unaffordable cities as least affordable. San Jose California and New York City are the two most unaffordable cities in the USA. According to household spending.
Fortunately, I live in Columbus Ohio. the 18th most affordable city in the USA.
Much of the difference amongst cities is land use and construction restraints. And booming/dying local economies.
As a sad reminder about the last four years, Pete Buttigieg will leave his post as Transportation Secretary having spent $7.5 BILLION to build 8 EV charging stations.
I remember giving a speech to Federal regulators in Washington DC and discussing the rise of housing rentership in the US. I said the US is veering towards a renter nation.
Today’s housing starts report revealed the biggest MoM jump in multi-family starts since 2016, and the highest SAAR for ‘renter nation’ since Dec 2023.
On a year-over-year basis, 5+ unit (multifamily) starts are are up while 1-unit housing starts are negative.
Unfortunately, the percentage change on a year-over-year basis were negative. -2.6% for 1-unit starts and -27% for 5+ unit (multifamily) starts.
Under Biden, home prices rose a whopping 38.3% while population (if you believe the US Census Bureau) rose 3.3%.
The latest jobs report was like the Cornell Hurd song, “It’s just the whiskey talking.” Except that this time it’s just the Biden Administration talking … and their jobs reports have been corrected/revised repeatedly.
The latest jobs report saw Nonfarm Payrolls rise by 256k and mortgage rates (conforming) rose above 7%. But what happens when the recent jobs report is revised downwards?
Mortgage applications decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 3, 2025. This week’s results include an adjustment for the New Year’s holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 43 percent compared with the previous week and was 15 percent lower than the same week one year ago.
Purchase application activity is up about 2% from the lows in late October 2023 and is now 15% below the lowest levels during the housing bust.
The Refinance Index increased 2 percent from the previous week and was 6 percent lower than the same week one year ago.
Was Freddie King correct? Is the US economy going down??
The US Treasury yield curve (10Y-2Y) has inverted to the positive side after a prolonged NEGATIVE inversion (from July 6, 2022 to Sept 5, 2024) marking the longest period of negative inversion since August 18, 1978 – May 1, 1980. Each negative inversion was followed by a recession.
The UST 10Y-3M yield curve tells a similar tale. The 10Y-3M curve inverts prior to recessions but goes positive just prior to recessions.
Yes, if the yield curve is a good predictor of recession, the US economy is going down.
Freddie King is playing a Gibson ES-355TDC guitar.
Existing-home sales have finally started to improve on a seasonally adjusted basis after a three-year decline.
Cause? Raging home prices combined with higher than normal mortgage rates. Home prices are up 35.4% under Biden while conforming 30Y mortgage rates are up 148%.
US home prices in the 20 largest cities rose 0.32% MoM in October (the latest data from S&P CoreLogic Case-Shiller), considerably hotter than the 0.22% rise expected. However, despite the MoM beat, the pace of annual acceleration has declined to its slowest since Sept 2023. At 3.62% YoY.
The Biden/Harris economic “miracle” was simply massive Federal spending (and borrowing) combined with hiring Federal workers. This can be seen in the following chart of Chicago Fed manufacturing index compared with Federal spending. Great times in the first months of 2021, but as Federal spending slowed, so did the manufacturing index. Last seen at -10.71 in December 2024.
Joe Biden, sold his soul for family wealth at the crossroads in Delaware.
Confounded Interest - Anthony B. Sanders 
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