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With existing home sales at their lowest since 2010 and new home sales finally hitting the wall, pending home sales were expected to decline MoM in August after an uptick in July (amid soaring mortgage rates and plunging affordability) and they did...bigly.

Pending home sales plunged 7.1% MoM in August (dramatically worse than the -1.0% expected) dragging sales down 18.8% YoY...



That is the biggest MoM decline since Sept 2022 and drops the overall index to exactly equal to its COVID-lockdown lows (the worst on record)

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All regions saw declines in August. Contract signings in the South fell to the lowest level since 2010, while the West posted the weakest reading in data back to 2001.

The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold.

“Some would-be home buyers are taking a pause and readjusting their expectations,” Lawrence Yun, NAR’s chief economist, said in a statement.

“It’s clear that increased housing inventory and better interest rates are essential to revive the housing market.”

And given where mortgage rates have gone since, pending home sales don't look like bouncing back any time soon...

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How long with Powell and his pals be able to keep this 'higher for longer' stress up as Americans' largest source of wealth evaporates?

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For the past 40 years, housing supply has not kept pace with population growth. A simple way to observe this fact is by looking at housing starts (i.e., new residential construction) as a share of the U.S. population. The figure above shows that housing starts as a share of the population has been on an overall decreasing trend since the 1970s. This decrease became particularly pronounced after the peak of the 2000s housing bubble. Housing starts as a share of the population decreased by roughly 39 percent in the 15-year period from January 2006 to June 2021. Researchers at Freddie Mac have estimated that the current shortage of homes is close to 3.8 million, up substantially from an estimated 2.5 million in 2018.

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US Housing Supply Continues to Lag Household Formations;

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Originally posted by SIGNYM:
According to the price/supply curves that they teach in macroeconomics, the increased price should have drawn in increased investment and increased supply, and brought the market back to "equilibrium".

All I can conclude is that the market is cornered by a monopoly of some sorts- probably a collusion between bankers and corporate investors - to suppress theoretical market activity.

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Originally posted by 6ixStringJack:
And if we somehow manage to scrape together enough cash to refuse to be bought out and turned into a renter for too long, they can always just set our house on fire like they did in Maui, right?

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