Home Sales Index Slides to Lowest Level Since 2020
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A gauge of pending US previously owned home sales fell in August to the lowest level since April 2020, evidence of a resale market slowed by higher mortgage rates & slower consumer spending.
The National Association of Realtors’ index of contract signings tumbled 7.1% to 71.8 from July, the group reported Thursday. The decline was larger than all estimates expected.
- Aug. Existing Home Sales (7-month low)
- Aug. Pending Home Sales (lowest since April 2020)
- Aug. Housing Starts (lowest since June 2020)
- Aug. New Home Sales (5-month low)
- Sep. Mortgage applications for home purchases: close to levels not seen since the mid-1990s (when population was ~70M lower)
- Sep. NAHB (5-month low; largest back-to-back decrease in nearly a year).
- 30-year fixed mortgage rates at highest since August 2000
A Few Charts to Look At
For the record, these were posted on the site and discussed in detail on how to execute best on this data for members here.
It Only Gets Worse from Here.
A chart presented without too much comment needed.
Final Word
The housing short has been on my radar for myself and clients for the last 90 days but executing on it was the actual thing that matters.
For home buyers demand destruction is next aka prices crashing.
This will not be like 2008 – there are no strippers with 5 houses but this will be dangerous as some approach negative equity like we’ve seen in Canada already.
We all have access to the data it’s how we interpret it then act on it to actually benefit our portfolios that matters.
Let me show you how to use that data and develop a way to express it so that you can generate returns. You can start with the new TLV Membership which applies the Absolute Return Framework but executes on that with long/short ideas using DITM options.
Dan
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About the Author
Daniel Bustamante is the founder, managing partner, and CIO of Bustamante Capital L.L.C., a multi-strategy hedge fund management firm based in San Juan, Puerto Rico. He has over 10 years of experience in the financial industry, specializing in equities, futures, and event-driven trading strategies.
He is also the founder of TheLongVol.com, a blog and newsletter that shares his insights on his investing process, travel, and other private investments. He has been featured in Bloomberg, Arizona Business Journal, Business Insider, Yahoo! Finance, Forbes, Seeking Alpha, and other publications over his career on Wall Street.
