U.S. Outlook: Gauging the impact of a housing slowdown
The plunge in new home sales during March caused a lot of buzz this week. It feels to me more like a cyclical change happening, rather than a weather-related shock.
- Something troubling may be going on with housing demand.
- New home sales are having difficulty building on last year’s healthy sales pace.
- We’ve seen an incredible jump in home inventory in just two short months.
- The housing lull should have little effect on the economy, rates, or Fed policy for now.
- The Fed could become more sensitive to the risk to home values and the economy if housing demand continues to languish.