5.9 C
New York
Friday, March 29, 2024

THIS HOUSING INDICATOR IS POINTING TO LOWER HOME PRICES

THIS HOUSING INDICATOR IS POINTING TO LOWER HOME PRICES

Courtesy of The Pragmatic Capitalist

If you’re looking for a real-time housing indicator look no further than the futures price of lumber.  As we’ve long opined, the housing market has benefited in recent quarters from strong seasonal trends and the first time home buyers credit.  Yesterday’s housing data was the first sign that our assumptions are true.  Perhaps more important are lumber prices, however.  Lumber has been forecasting weakness in housing since the beginning of June.  Since topping out in early June lumber futures have declined nearly 20%.  Lumber prices and new housing starts have a very high correlation.

Dec08 HousingStarts7 THIS HOUSING INDICATOR IS POINTING TO LOWER HOME PRICES

 

Gauging from the recent move in lumber futures it’s safe to say that analysts might be overly optimistic about the recovery in housing.   If lumber futures continue their trend downwards and reflect the seasonal weakness I expect across housing it’s safe to assume that our woes in the housing market might not be over.

 THIS HOUSING INDICATOR IS POINTING TO LOWER HOME PRICES

 

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x