JUNE 14, 2022 – It is rare that you see and know a peak is occurring as you speak. Three months or a year down the road it is easy to look back and see when a top occurred. But, while it is going on….that is difficult. Being in the forest makes it tough to see the trees.
There are 4 steps for the housing market (any market for that matter) to go from growth to decline.
Step 1 – Acceleration in appreciation begins to slow down. This occurred 6+ months ago.
Step 2 – This is occurring now. Annual home appreciation in June will be lower than it was in May. We will look back at May-June 2022 and see the rollover in annual appreciation. Essentially, acceleration has turned negative. Better to call it deceleration.
Step 3 – This is the opposite of Step 1. The steep upward slope of accelerating price appreciation now becomes a steep downward slope of slowing price appreciation. This will occur the remainder of 2022 and into 2023.
Step 4 – The final step occurs when the accelerating slow down (think of slamming on the breaks) takes the market from price appreciation into price decline. This seems a far way off. But, I think we might be in for a surprise and see declining home prices quicker than we expect. We shall see.
As an aside, Bitcoin (slightly below $20k) and Ethereum (around $1k) are nearing major lows. The next move should take both to record highs (4x-5x moves from these levels).
Shalom,
The Mann
Tag Archives: housing
New AEI dataset: Housing Market Indicators in the 60 largest US metropolitan areas
April 9, 2019 – In my opinion, the AEI provides the most neutral analysis of the housing market. They likely have the most data. Unlike NAR, there is no bias. Below is their major announcement today. I hope you find their reports useful.
Just to be transparent – I am not a member of AEI (not even sure if such exists). I do not contribute to them. I have attended some of their meetings on housing.
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New AEI dataset analyzes the 60 largest US metropolitan areas
Housing markets are inherently local, making them notoriously difficult to analyze due to the lack of reliable data at the local level. A new dataset from the AEI Housing Center, the first in a series of quarterly reports, aims to fill this void by analyzing housing market data for the 60 largest US metropolitan areas, as well as for the nation as a whole. The current dataset looks at housing data from 2018:Q4.
AEI Housing Center Codirector Edward Pinto and Senior Research Analyst Tobias Peter explain “Our goal is to provide the public, media, and decision makers with accurate and reliable metrics to assess the state of their local housing market in near-real time. A well-informed market place and its participants will aid in promoting sustainable homeownership.”
Among the national Housing Market Indicators for 2018:Q4:
- Rate of house price appreciation (HPA): 3.9%
- Mortgage risk index: 11.1%
- Share of buyers of entry level homes: 55%
- Average sale price for entry level homes: $197,000
- Share of new construction sales (compared to all home sales): 11.2%
The Housing Market Indicators for the 60 largest US metropolitan areas, along with all associated data, are available on an interactive website here.
This was made possible by AEI’s new merged property and mortgage financing national dataset, which consists of over 34 million home purchase transactions.
The data are updated quarterly. The next release of Housing Market Indicators, which will analyze housing data for 2019:Q1, is scheduled for May.
Codirector, AEI Center on Housing Markets and Finance
240-423-2848