024: Housing Report 07-20-23

Ready to navigate the intriguing twists and turns of the housing market? With Megan Horneman, our Chief Investment Officer at Verdence Capital Advisors, we step into the world of housing data, where things aren't always what they seem. Megan uncovers the reasons behind the rising trend in home builder sentiment, ignited by the shortage of existing homes available for sale. She explains why homeowners clutch their low-interest rate mortgages tightly, unwilling to step into the realm of 7% mortgage rates.

The plot thickens as Megan delves into the June building permits data - a key indicator for construction. The numbers might be a touch disappointing, but Megan urges us not to view this as a sign of a broader trend. She attributes the dip to high interest rates and a lack of inventory, rather than a housing market crisis. Further, she emphasizes that the puzzles of the housing market won't derail her economic growth outlook. Follow along with us on this journey through the housing market - send in your thoughts, questions, and feedback to podcast@verdence.com.

Welcome to Markets with Megan. This is Megan Horniman, the Chief Investment Officer for Verdance Capital Advisors. We're going to come today and talk a little bit about the housing data that we've received this week. I'm starting with the home builder sentiment, which has consistently been improving in recent months. And it's been improving because the inventory of existing homes that are on the market that purchasers can buy is very low. That's because people are not willing to give up their low interest rate mortgages to go and purchase a home with mortgage rates near 7%. So we're seeing home builder sentiment increase because we're seeing more demand for actually new construction.

Now today we also got the building permits for the month of June, and this is what we like to see as a leading indicator for construction. They were disappointing. They actually declined for the month and came in less than expected. We still think that we're not going to take one month as a whole trend here, but housing will continue to be challenged by a couple of things Again high interest rates and no inventory. So we don't think this is a huge impact on our outlook for economic growth. It's just one of the things that we do like to look at and investors like to hear about, especially when you see the headlines about the housing market. So that's all I have today. If you have any questions, comments or feedback, please feel free to reach out to podcast at burdenscom.