US housing market faces a severe transactional freeze
The US housing market is entering a severe retrenchment characterized by a buyer-seller price mismatch and plunging transaction volumes.
The argument
The hosts argued that despite 30-year mortgage rates falling below 6%, pending home sales are diverging sharply to the downside compared to seasonal norms. Sellers are refusing to lower prices, leading to a frozen market where homes sit on the market longer and consumer demand for home improvement has collapsed.
The thesis, stress-tested
✓ What validates it
- ✓A sustained rise in median days on market in national housing data
- ✓Continued double-digit declines in new pool builds and home renovation spending in upcoming quarterly reports
▸ Risks discussed
- ▸Sellers may eventually capitulate on pricing, unlocking transaction volume
- ▸Further declines in mortgage rates could revive buyer demand
Hear it yourself
"US pending home sales. Holy mackerel. Cliff. Okay. That's part of that ten year though, hitting four falling to 4%. Like, people are not bullish on the economy right now. Let's look at pending home sales."
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