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NAHB Prospective Buyer Traffic Points To A Bleak House Price Outlook

US DATA
  • We wrote earlier how the NAHB housing market index surprising again to the downside bodes ill for the economy in 2023, especially with respect to the u/e rate – see here:
  • There are equally weak implications for house prices when looking at prospective buyer traffic, down 5pts to 20 for the lowest reading since Apr’20 (13) and prior to that 2012.
  • Whilst the level is historically low, the change over the past year is unprecedented in the face of a severe climb in mortgage rates.
  • There are caveats here that limit a direct read to heavily negative house price growth from a historical relationship, including i) it’s a change from a particularly unusual period that saw structural change in the market with different post-pandemic buyer demands and ii) the fact that the housing market is notably tighter than the Great Recession (existing home sales are 3.2 months of supply compared to 6-7 months in 2006).
  • Nevertheless, the trend direction for house prices looks lower, likely weighing on household wealth in the process albeit after significant increases already accrued in the post-pandemic period to date.

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  • We wrote earlier how the NAHB housing market index surprising again to the downside bodes ill for the economy in 2023, especially with respect to the u/e rate – see here:
  • There are equally weak implications for house prices when looking at prospective buyer traffic, down 5pts to 20 for the lowest reading since Apr’20 (13) and prior to that 2012.
  • Whilst the level is historically low, the change over the past year is unprecedented in the face of a severe climb in mortgage rates.
  • There are caveats here that limit a direct read to heavily negative house price growth from a historical relationship, including i) it’s a change from a particularly unusual period that saw structural change in the market with different post-pandemic buyer demands and ii) the fact that the housing market is notably tighter than the Great Recession (existing home sales are 3.2 months of supply compared to 6-7 months in 2006).
  • Nevertheless, the trend direction for house prices looks lower, likely weighing on household wealth in the process albeit after significant increases already accrued in the post-pandemic period to date.