Fun with Housing Charts

Thursday, May 17, 2007 | 12:30 PM

I've come across quite a few fascinating Housing charts over the past week.

Taken together, they tell a tale of sector that has yet to see a bottom. And I suspect the economic impact has yet to be fully felt:

Housing is not getting better anytime soon:  This is an survey discussion asking about various apsects Builder's Businesses. Its bad enough that the Index (HMI) in May dropped 3 points to 30. It was bad across the board -- but the real ugliness was in traffic of potential buyers -- that's a leading indicator to Builders as to how much product they will be moving -- It dropped to 23. In the heart of the selling season (survey data was done in May). 

>
NAHB Housing Index

Hmi_april

Chart courtesy of NAHB

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Starts and New Permits are still dropping rapidly. Given all the excess inventory, this is actually the silver lining in the slowdown.

 Housing Starts and Permits
Starts_permits

Chart courtesy of Northern Trust

Marketbeat points out that new Housing construction has now slipped to around 1.5 million units -- that of a normal, growing economy. Expect housing starts generally falls to about 800k to 1 million units before a rebound is seen.
>

IYR Top?

The DJ Real Estate Index is a potential 20% loser from here, based on the Head & Shoulder topping pattern:

Real_estate_hs

Chart courtesy of Mike Panzner

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What does this mean to the economy? The clear implication is that consumer spending willr meain pressured, and retail stocks -- excepting the Luxe goods -- will continue to have a difficult environment.

>
NAHB Housing Index and Consumer Spending
Nahb_coincindent_spending

>

 



Sources:
Builder Confidence Slips Again In May
NAHB, May 15, 2007 
http://www.nahb.org/news_details.aspx?newsID=4675

NAHB/Wells Fargo Housing Market Index (HMI)
http://www.nahb.org/page.aspx/category/sectionID=134

Two Markets Diverging
David Gaffen
WSJ, May 16, 2007, 4:10 pm
http://blogs.wsj.com/marketbeat/2007/05/16/four-at-four-two-markets-diverging/

Thursday, May 17, 2007 | 12:30 PM | Permalink | Comments (21) | TrackBack (1)
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Listed below are links to weblogs that reference Fun with Housing Charts:

» DJ US Real Estate Index Paradox from datawink
bigpicture had fun with housing charts, and I had to join in specifically for the DJ US Real Estate Index (IYR) chart outlining a head and shoulders pattern from Mike Panzner. A motivator was determining whether signals from TA would align with data... [Read More]

Tracked on May 18, 2007 2:01:42 AM

Comments

Today, Bernanke was bearish on the housing market too.

Bernanke Says Subprime Lending Curbs May Put `Restraint' on Housing Market

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAN53OM9glxQ&refer=home

Posted by: V L | May 17, 2007 2:01:58 PM

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