US housing market enters structural slowdown
The speaker argued that the US housing market is undergoing a major macro shift as home price growth slows rapidly, led by declines in previously hot pandemic-era markets.
The argument
S&P Case-Shiller and FHFA indexes both show home price appreciation slowing to multi-year lows, with FHFA hitting its worst rate since 2012. The speaker noted that speculative markets in Texas and Florida are leading the downturn due to high inventory, surging insurance costs, and property taxes, which are crushing affordability despite tight national supply.
The thesis, stress-tested
✓ What validates it
- ✓Active listings and inventory continue to rise in Texas and Florida
- ✓Homebuilders increase buyer incentives and mortgage rate buy-downs to protect volume
- ✓Case-Shiller and FHFA annual growth rates continue to trend downward in subsequent months
▸ Risks discussed
- ▸Northeast and Midwest housing markets remain relatively stable due to tight inventory
- ▸A significant drop in mortgage rates could temporarily revive buyer demand
Hear it yourself
"prices are now doing something they were not supposed to do. After years of being told the housing market was poised to make a comeback on lower interest rates, the data shows something else entirely. First of all, S and P Case Shiller, their index just declined for the second straight month."
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