Neighborhood Inscope
By Dr Denver H. Bubble
For the second month in a row, homebuilder confidence tumbled
amid broad-based declines across sales, expectations and buyer traffic (down 4
to 56 and b 60 print expected) as hope begins to fall toward to the housing
market's reality. In addition, National Association of Home Builders (NAHB) six-month
sales outlook dropped to the lowest since March 2016 while a measure of current
sales for single-family homes decreased to a three-year low. “We are hearing
from builders that consumer demand exists, but that customers are hesitating to
make a purchase because of rising home costs,” said NAHB Chairman Randy Noel.
“However, recent declines in mortgage interest rates should help move the
market forward in early 2019.” Randy is of course paid to talk up his book, but
we do not see the housing market recovering in 2019, but instead the continued
decline until this bubble finally bursts.
Looking at the three-month moving averages for regional Housing
Market Index (HMI) scores, the Midwest dropped two points to 55; the West and
South both fell three points to 68 and 65, respectively; and the Northeast
registered an eight-point drop to 50. Regional, Denver is still doing well
compared to the rest of the country, but what that should tell us is the housing
bubble bursting impact will lag hitting in Denver. So if you see continued
steep declines across the country, hold off on buying a home because those
prices will be coming to Denver neighborhood near you.