Normal maybe boring but is SPECTACULAR when it comes to the HOUSING MARKET!
I must consume 5 to 10 articles, videos and podcasts a day about the state of the economy and where things are headed! Although no one knows for certain there are a few things I can tell you. Most everything about our current economic climate is good to great! GDP, Employment, Consumer Confidence, Wages, Stock Market are all UP and growing! Unemployment, interest rates and inflation are all low and historically LOW! Lending practices are still semi-strict, not like they were back before the bust in 2008 leading up to the housing crash (In my opinion the cause of the crash!)! Back then if you could fog a mirror you could have gotten a loan. Currently, the slowing of the housing market is due to a lack of inventory and the current elevated prices. And because of low inventory, housing sales have slowed and the large price increases we have seen in the last 2 or 3 years will level off because of wage and home price equalization. Home prices are directly related to wage. Wages grow so do housing prices. Da….you have to make money to pay for your house and if interest rates are low and wage grow a little then homes prices grow a little. We just might be in a really nice place with the relationship between the economy and housing! Nothing that I see shows any signs of a major break down like in 2008! Below is a great blog that sums up the data really simple! We are in a NORMAL housing market and normal is not very interesting or headline news! But normal is really good if you don't want to live on a rollercoaster!
Consumer confidence is by some measures at its highest level since 10/2000. Unemployment is microscopic, pay is up, and GDP growth is strong. Yet housing slumps. Pending sales are down Y-o-Y for seven straight months, existing sales have fallen four months in a row, home price increases are slowing, like start, homebuilder share prices are struggling, and inventory looks to be finally bottoming. Rising prices are finally squeezing demand.
Elliot F. Eisenberg, Ph.D.