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Rick Palacios Jr. Profile picture
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14 Jun, 7 tweets, 3 min read
Going through our monthly macro housing/econ deck again for June. Here are some charts catching my attention this month.

1/7: The share of Americans expecting home prices to increase over the next year is now higher than back in 2005.
2/7: Looks like tax advantages of owning a home aren't as big of a driver for housing as some thought.
3/7: Trend of shrinking home from 2015-2020 appears to be over. Hopefully not the return of McMansions.
4/7: Median new home prices are just 10% more than resale homes (lowest spread in over a decade). Combination of resale prices shooting higher and builders focusing on entry-level price points last few years driving this trend.
5/7: Amazing how many mortgages were adjustable rate back in prior cycles (not just subprime bubble). When/if rates rise it'll be interesting to watch this trend.
6/7: ~16% of FHA mortgages use additional government assistance to cover home purchase costs. Not much (if any) skin in the game on these loans out the gate.
7/7: Stocks tied to housing crushing broader market. Not meme stock notoriety, but still impressive.

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More from @RickPalaciosJr

Rick Palacios Jr. Profile picture
9 Jun
New home sales fell in May, Y/Y & M/M. Theme of the month was sales decline by builder design. Few comments on demand slowing or skittish buyers, even w/new home prices +18% Y/Y nationally (survey record). Builder commentary from across the country per our survey to follow...
#Nashville builder: “Gapped out. Sales resume in June as new communities & phases start to open. By moving ability to contract on inventory homes later to finished drywall stage (window installation stage previously), expect sales to show continued decline. Decline by design.”
#Charlotte builder: “Paused sales from mid-May to mid-June in all communities & will selectively release homes for sale in the last 2 weeks of June & coming months. Sales look lower vs. last month but was capped due to limited lot availability & no inventory.”
Read 28 tweets
Rick Palacios Jr. Profile picture
3 Jun
Some fresh home builder commentary for top #Texas markets. In general, buyer interest lists aren’t shrinking much, and if a few drop-off, builders are easily backfilling. Drumbeat a bit louder on prices getting too high. Demand still pretty nuts.🧵to follow...
#Houston builder: “Buyer interest lists are shrinking slightly. Likely too much price pressure, it’s out of hand.”
#Houston builder: “We’ll be metering sales again in June.”
Read 11 tweets
Rick Palacios Jr. Profile picture
19 May
Here's May mid-month home builder channel check I hinted at earlier. Builders are pushing prices w/little pushback, though some starting. Some builders are using price escalators & highest/best offer. Many limiting pre-sales, shifting to spec, & pricing home later in build cycle.
#Dallas builder: “Not selling build jobs in May, starting specs only, and not selling until drywall. Costs are too out of control for us to take the inflation risk on build jobs. So sales are way down.”
#SanAntonio builder: “Only selling specs at Sheetrock stage. Last month, it was frame stage.”
Read 28 tweets
Rick Palacios Jr. Profile picture
14 May
Going through our monthly macro housing/econ deck (it's almost 400 slides)! 10 charts that caught my attention.

1/10: Apparently people buy homes even if mortgage rates aren't 3% or below.
2/10: Looks like mortgage lending is back to pre-COVID norms. Lenders saying 'easy' fell off a cliff in 2Q20 but now back to norm.
3/10: Builders jacked prices 16% YOY in April, about 4x the rate of appreciation pre-COVID.
Read 10 tweets
Rick Palacios Jr. Profile picture
10 May
I did an April home builder commentary 🧵last week, switching to building material dealers this week (companies making/selling products to home builders). We asked, “What worries you the most, regarding your business & the remainder of 2021?” Here’s what followed…
“Material cost volatility degrading margins for the duration of the year; labor availability is a close second.”
“Continued supply chain disruptions and product availability.”
Read 10 tweets
Rick Palacios Jr. Profile picture
6 May
Here’s on the ground local home builder commentary from across the country per our April survey. A lot of builders are pressing the pause button &/or slowing things down until construction costs moderate & they can catch up with sales. Worries about buyer price ceilings too...
#Chicago home builder commentary: “We sold all of the homes we had in early 2021 & haven’t started anything new, & may not due to the cost of construction. Can’t hold pricing for clients longer than 45 days with rising material pricing.”
#Nashville home builder commentary: “Pray for lower lumber prices.”
Read 13 tweets

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