It might be too early to state that housing is beginning to falter, but we have had three months in a row of falling existing home sales numbers and new home sales slumped in June. Many experts are claiming that the lack of inventory is the primary reason for the weakness.
I think we are seeing a change. The cost of homes and increasing mortgage rates play a part but we have been in a multi-year bull phase in housing that has also tracked the stock market and the economy. It does not matter why there is weakness in housing, it matters that it exists, that the FED is insisting on continued rates increases, thus higher mortgage rates down the road, and that three months of weakness begins to look like a trend.
These are the first small cracks in an otherwise strong economy. Let’s hope they do not spread.