patrick.net

One reason why new home sales will reach a record level.........The population is at record levels.

Strategist says

One reason why new home sales will reach a record level.........The population is at record levels.

Yes that SHOULD be the case but so far new home sales are mired in the rut.
With a greater population AND Lower prices, better jobs, lower student load debt and new home sales would soar- But none of those three things exist today

smaulgld says

Strategist says

One reason why new home sales will reach a record level.........The population is at record levels.

Yes that SHOULD be the case but so far new home sales are mired in the rut.

With a greater population AND Lower prices, better jobs, lower student load debt and new home sales would soar- But none of those three things exist today

Patience my friend. Those homes will be built, no matter what.

Ironman says

Strategist says

One reason why new home sales will reach a record level.........The population is at record levels.

Wow, you started drinking really early today for the holiday, didn't you?

So what time do I come over with the beer?

Another factor while the population is growing, culturally people are either renting more or living in larger groups- either with roommate or at multi generational homes-this reduces the need for new homes

Ironman says

". The Millennial generation will NOT be buying houses anytime soon.

Buying a new home is an old idea

Ironman says

Strategist says

So what time do I come over with the beer?

You missed it, that was yesterday. Today we have rain. There's always the July 4th party, which is bigger. I wonder if Dan will show up this year.

Ironman says

The idea that there is a need for MORE houses for a larger population is bogus.

Still drinking from yesterday's BBQ?
And no, Dan won't show up. He's not talking to us, you know.

Ironman says

Population in 2000 was 282 million and roughly 990K houses were sold.

US Population in 1960 was 181 million and about the sames new homes sold then as now

Strategist says

And no, Dan won't show up. He's not talking to us, you know.

Did you deny climate change or refute Elizabeth Warren's Native American heritage?

Paging Logan... Paging Logan...

smaulgld says

Strategist says

And no, Dan won't show up. He's not talking to us, you know.

Did you deny climate change or refute Elizabeth Warren's Native American heritage?

Hell no. He became mean after losing an argument.

thunderlips11 says

Paging Logan... Paging Logan...

Like I have said from the start, this cycle won't have enough qualified home buyers once you exclude cash buyers to have a real recovery.

Ages 17-29 don't buy homes Ages 49-65 don't buy homes. The very fact that this was missed by almost everyone still troubles me. Need to wait for years 2020-2024

Miss Housing Is In Nirvana... the top Wall Street Analyst in housing with her Nirvana thesis confused everyone because she had demographic economics backward and because everyone listened to her in 2013 and 2014, it confused people

Unlike some people who gave a more modest outlook for sales demand

Home Builders, New Homes Sales And The Affordability Myth

https://loganmohtashami.com/2016/01/25/home-builders-new-homes-sales-and-the-affordability-myth/

Last year I had 8%-12% sales growth with some upside if median home prices cooled down which is only a make shift in lower sales price points thesis

But everyone had 24%-41% sales growth because 2014 was the biggest miss in new home sales every recorded in a up cycle, so they over played their 2015 sales estimate

Which lead to this correction

As noted here for 2016 April 23, 2016, the headline was Time For New Home Sales To Show Growth

https://loganmohtashami.com/2016/04/23/time-for-new-home-sales-to-show-growth/

Not talking about the headline blowout number of 619K... that number will be revised down, revisions were all positive in the past few months and that is what really matters.

Slow and Steady until demographics get better, but new homes are very expensive, existing homes much cheaper

and for the record this is what the population to new home sales data looks like in a chart

New single-family home sales are about 4.7% below the 1963 start of this data series. The population-adjusted version is 39.1% below the first 1963 sales and at a level similar to the lows we saw during the double-dip recession in the early 1980s, a time when 30-year mortgage rates peaked above 18%. Today's 30-year rate is around 4%.

Be mindful of the housing inflation thesis but most important of all

Demographic economics matter for housing more than any sector outside of Health Care which is heavy for Older Americans

- No more exotic loans left in this system, lending is back to it's very liberal lending format in a very subsided housing market

Discipline, Discipline, Discipline

On another note Happy Memorial Weekend and remember our fallen

Logan Mohtashami says

Ages 17-29 don't buy homes Ages 49-65 don't buy homes. The very fact that this was missed by almost everyone still troubles me.

No need to be troubled. The troubling fact is those 25-54 are not working asa percentage as much as they used to and that includes those aged 30-48.

No one is missing anything that only Logan sees!

Strategist says

Hell no. He became mean after losing an argument.

"an" argument- which one

Re "BIGGEST RISE IN 8 YEARS!!!!

The law of small numbers- 8 years ago new home sales were low too

https://smaulgld.com/housing-recovery-law-small-numbers/

smaulgld says

The troubling fact is those 25-54 are not working asa percentage as much

I counter than thesis with this

We are near full employment

We are only missing 2.8 million Americans from the peak of the previous cycle in terms of prime age labor force growth

Out of those 2.8 million, a lot of them have given reasons why they don't work.

Pretty much if you're not working after 8 years in this cycle, it's you not the economy.

These aren't home buyers anyway, renters at best

New Home Price inflation is a function of 4 decades of building bigger and bigger homes

1,500 median sq foot in 1975 to 2,500 + median sq foot in 2016

You have limits when you only build to the high end

DHI and some other builders have tried this market, but I don't see that being a big fact until the next decade when you get massive supply of proper aged Americans

Demographics matter

Census live population chart is the best chart for you guys to go see what I am talking about

http://www.census.gov/popclock/?intcmp=home_pop

Logan Mohtashami says

We are near full employment

You and St.Louis Fed President Bullard seem to believe that, reality indicates otherwise

Those with student loans for the most part are not those 49+
Rather they are those in their prime home buying years 30-48
That can't be dismissed with false "full employment" palaver
But I guess that's where Socialist Slob Sanders comes in to forgive student loans and give free 'helt care and collige' to everyone-paid for by 'dah won pahsent in dis cundree'

smaulgld says

You and St.Louis Fed President Bullard seem to believe that, reality indicates otherwise

Unemployment Claims are at 43 year lows

Job Openings are at 16 year highs with 5.8 million Job Openings

For years the demographic prime age labor force growth data numbers was showing this to be true soon and that day has come

Unemployment Claims are at 43 year lows
Meaningless stat because
-the economy was not doing well 43 years ago 1971-72. Does it mean we are doing as well as during high unemployemnt, high inflation 1971-72 times?
-fewer people attached to the labor force means few people to get fired
-long term unemployed run out of benefits and can't reapply

The job market is good in select parts of the country-the people that think the economy and labor market are doing well for the most part live in those areas
LA, SF, Boston, NYC- the ones driven by finance, real estate
The rest of the economy is in the toilet but the stock jockeys and real estate pumpers don't see it- it's not their world

It's very easy to get a part time job today- I know many who have two of them
Companies that dont want to pay obama care have set up multiple shifts for part time workers
This brings down the unemployment rate and claims and makes it look like lots of jobs are being created
Its shuffling labor around to make it look like there is "full employment"

154 Million people working

With the world slowing down since 2011 and a oil + commodity crash and it did nothing to change the curve here in America

For a country of our size with 322 million people

Demographics and the U.S. Dollar matter where other countries are at the mercy of the dollar

Why China is so desperate to get out of it's export economy and into a service one

Another reason there are low jobless claims
I've seen this dynamic- someone with two part time jobs either gets fired or hates one of their partime jobs they go and get another part time job
They never file a claim AND they count as a new job created and if they leave voluntarily it makes the labor market appear "dynamic"

Logan Mohtashami says

Why China is so desperate to get out of it's export economy and into a service one

Excatly everyone would rather consumer than produce- but someone has to do the work!
China will eventually outsource to SE Asia and Africa

smaulgld says

I've seen this dynamic- someone with two part time jobs either gets fired or hates one of their partime jobs they go and get another part time job

They never file a claim AND they count as a new job created and if they leave voluntarily it makes the labor market appear "dynamic"

Near 2 decades low here

Logan Mohtashami says

Near 2 decades low here

The statisitc above is in total workers, not as a percentage of the labor force.
Since the labor force has shrunk the number with two jobs will also have shrunk

I have seen dozens of employers shift their ENTIRE work force to part time- with only a full time manager.
It's true some of the workers only have ONE part time job, when they used to have one fuil time job

But someone is peddling fiction when they claim there are plenty of full time well paying jobs- ie more today then before the Great Recession

If the economy/job market was firing on all cylinders an ignoramus like Sanders wouldn't be attracting crowds and a neo nationalist like Trump wouldn't be either
People would just want "FOUR MORE YEARS' of the same- clearly they don't

#1

There is no deviation of trend here, outside the one time in 2007 where prime age labor force did peak and declined

and we had a uptick of the Elderly

See to someone who doesn't track data for a living, the false narrative economic theory might sound plausible

But to those who actually do track for a living but don't have a ideological spin, we can easily pin point the flaws in the economic theory that is trying to be sought out

Logan Mohtashami says

I see something different re median household income- from your friend Bullard's St. Louis Fed

US. Bureau of the Census, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/MEHOINUSA672N, May 30, 2016.

smaulgld says

The statisitc above is in total workers, not as a percentage of the labor force.

cute...

smaulgld says

I see something different re median household income- from your friend Bullard's St.. Louis Fed

That data point moves with employment to population metrics if you channel the data line going back years to employment to population wages they track each other

Again

It's cute, but it only works on people who aren't versed with economic data, please, test me here I have a ton of more charts to prove your economic theories wrong...

I only require you to speak

:-)

Those wonderful "full time" jobs are not helping as household income is IN DECLINE while Home Prices RISE

That is the simple reason fewer homes are being sold

US. Bureau of the Census, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/MEHOINUSA672N, May 30, 2016.

Let me make it easier for you guys

Here is the Table 1. Median usual weekly earnings of full-time wage and salary workers by sex, quarterly averages, seasonally adjusted

right here =------> http://www.bls.gov/news.release/wkyeng.t01.htm

Logan Mohtashami says

That's a nice change from the selfies - Thanks!

Ironman says

Go pull charts of the LFPR for 25 to 54

Ok 81%

Due to Demographics you naturally get a uptick

Final data lines correlates .. shocking .. right with the census data and demographics

smaulgld says

That is the simple reason fewer homes are being sold

Which tracks employment to population metrics... shocking how that works, isn't it?

Ironman says

Logan feels working full time at Home Depot making $15/hr is awesome, e

If that's all you can do, that's all you go do then

Ironman says

Somehow, Logan feels working full time at Home Depot making $15/hr is awesome, even though that same worker use to have a job paying $30/hr with full benefits. Hey, the government stats tell us UE is at 5%, so every thing is great and tons of people will be buying new houses on their new $15./hr wage..

People are doing so well that we don't need free collidge and helt care in dis cundree. We don't need no stinking money from dah won pahsent we can take care of ourselves!

Logan Mohtashami says

That is the simple reason fewer homes are being sold

Which tracks employment to population metrics... shocking how that works, isn't it?

Higher new home prices and fewer people with income to buy them- yes simple- no chart or selfie required to explain

smaulgld says

Higher new home prices and fewer people with income to buy them- yes simple- no chart or selfie required to explain

Shocking how this stuff works

One of these days, you guys are going to remember my demographic economics and then it's going to make sense

Outer band limits can be discussed both positive and negative

But not the core thesis ...

That's kind of how economics works

If you theories were valid we would see much lower bands of economic output.. especially in this cycle...

Which I have said since 2010, was going to be weak... but you guys are taking it to a much darker place...