Does anyone remember the lack of labor thesis for the lack of housing construction in the previous expansion 😏
We used to build a lot more housing starts with a lot fewer workers. It was almost as good as the mortgage rate lockdown thesis and that we had no homes to buy thesis from 2013-2019 😎🥂
What's the difference now?!?!? Demand is much better, which means the monthly supply gets below 4.3 months. Post-1996 that is where you want to be for housing starts
If you're waiting for lumber to crash housing, your first clue will be monthly supply will get over 4.3 months on 3- month average. Then wait a couple of months to see if it trends higher; if that doesn't happen, don't push the housing crash thesis. Rates beat Lumber for now.
As long as demand keeps the monthly supply below 4.3 months, housing is ok. The builders are not in the best spot if rates rise. We are no longer working from the low bar that was relevant from 2008-2019.
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