US Q4 GDP Forecast (Trump’s Final Reading) Is 7.541% While Home Prices Growth At 10.2% YoY

According to the Atlanta Fed’s GDPNow forecast, US GDP forecast for Q4 is 7.541%. This combined with elevated U-3 unemployment (6.7% thanks to state and local government shutdowns) and slowing growth for low-wage workers (those most impacted by government shutdowns) shows that the US economy is still strong. Despite the AP saying “Biden inherits damaged economy, with signs of hope emerging”.

FHFA’s purchase-only house price index is soaring at 10.2% YoY, thanks in part to massive money printing by The Federal Reserve (25.4% YoY).

The Biden Administration is already altering the employment landscape by cancelling the Excel Pipeline deal (killing 10,000 jobs) and trying to raise the minimum wage to $15 per hour (that the CBO claims could cause 3.7 million jobs to be lost). Let’s see how Biden and Company regulate their way to economic growth. /sarc

And good luck trying to increase homeownership rates with historic low housing inventory and skyrocketing home prices.

December Existing Home Sales Growing At 22.24% YoY While Inventory Crashes To All-time Low (Best Year Since 2006 And The Housing Bubble!)

December’s existing home sales numbers are out for December 2020. The numbers are 6.76 million SAAR existing home sales, growing at 0.7% MoM. But on a YoY basis, existing home sales grew at 22.24%.

The troubling chart, and the chart that HUD, Fannie Mae and Freddie Mac should play close attention to, is existing home sales inventory and existing home sales median price. Inventory has plunged to an all-time low while median price fell slightly from its all-time high.

It will be tough for HUD and the GSEs to increase affordable housing (as promised by Biden) with roaring home price growth, a severely limited supply of housing available and low M2 Money Velocity.

How can the Biden administration increase “affordable” housing? Loosening credit standards is the obvious (and economically dangerous) way. Eradicate local zoning (to help relieve the supply constraint)? The Federal Reserve is already printing money at a breakneck pace, but that is helping drive home prices up and not helping low income households.

I suggest that the Biden Administration think carefully about trying to solve this supply problem rather than simply calling for a cavalry charge from The Federal Reserve and Treasury.

Addendum: Median price of EHS is growing at housing bubble highs.

Let’s see if the foreclosure moratorium impacts the available supply after Covid disappears.

Atlanta Fed GDP Forecast For Q4 At 10.4% QoQ, Thanks To Housing (Pending Home Sales +16% YoY!)

Joe Biden is having a marvelous Christmas thanks to Donald Trump. Trump’s gift? A Q4 GDP Forecast of 10.4% QoQ with improving unemployment rate of 6.7%.

And the gift gets better with pending home sales at 16% YoY.

The pending home sales YoY are not included in the Atlanta Fed GDPNow forecast for Q4, but housing starts, existing home sales and new home sales are included.

Merry Christmas and Happy Holidays everyone!

Give Me A V! US Existing Home Sales Rise 25.8% YoY As US GDP Q3 Revision Rises To 33.40% QoQ (Inventories Hit All-time Low!)

According to the National Association of Realtors, existing-home sales decreased in November to a seasonally-adjusted annual rate of 6.69 million – down 2.5% from the prior month, but up 25.8% from one year ago. As US GDP for Q3 was revised to 33.40%. This looks like a V-shaped recovery.

This comes as the US Congress passes $900-billion COVID-19 stimulus package as part of $2.3-trillion government spending bill. Of course, members of Congress have not read this 5,593-page bill. It’s over 5,000 pages, arrived at 2pm today, and they are told to expect a vote on it in 2 hours (5,593 pages in 2 hours???). This reminds of House Speaker Nancy Pelosi’s infamous press conference where she said that Congress has to pass the Obamacare bill in order to find out what is in it.

Here is the 5,593 page bill that had to be read in two hours. That is only 2,800 pages per hour. Piece of cake! Or piece of pork.

Inventory of existing home sales fell to the lowest level in modern history as median price of EHS fell slightly in November.

Historic low inventories of homes for sale is why Biden’s $15,000 tax credit for first time home buyers is not wise. It is like throwing gasoline on a fire.