Does anyone remember the lack of labor thesis for the lack of housing construction in the previous expansion π
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 ππ₯
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.
You Don't have to be a hyperinflation gold bug podcast stock trader who sounds bearing 24/7 to make $$$ in a reflation trade thesis. You just need to know this has limits and don't miss this expansion like you did last time πΊπΈπͺπ½ππ₯ππ₯ππ
1. The price growth in 2013 was not warranted at all; we simply didn't have the right demographics for housing sales to grow that much, but the market itself cooled pricing down as rates went over 4%, the rate of growth pricing fell.
2. That 1.60% -3% move in the 10-year yield created a noticeable softening in demand, and in 2014, purchase application data trended negative on average 20% year over year. It created a solid bottom for us to work from.
No credit speculation, no exotic loan debt structure, no booming mortgage demand, it's not a bubble folks, it's just Americans wanting somewhere to live housingwire.com/articles/this-β¦