Reckless policies by the Federal Reserve did not just create a monstrous stock bubble. Money printing and zero percent rate mandates bolstered today’s housing balloon — one that rivals the mid-2000s insanity.

Folks may be coming to terms with the notion that stocks are trending lower in 2022. Yet far fewer seem to think that there are problems in residential housing.

However, the data suggest challenges. Sales of new homes have been plunging…

Yet the inventory for new homes has been rising dramatically.

In a similar vein, according to Redfin, new listings catapulted twice as fast in the most recent week versus the same period one year earlier. And signed contracts on existing home purchases? Down a gargantuan 9% year-over year.

  • With mortgage rates hitting highs not seen since 2009…
  • With the cost of homeownership kicking potential buyers out of the pool…
  • With inflation punishing homebuilders with some of the highest commodity/construction costs ever…

Shouldn’t one expect prices to cool off conserably?

Indeed, the number of home sellers lowering prices has reached the highest level since October 2019.

 

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