Well over a year ago, we first suggested that the conventional wisdom thesis for the bounce in home prices - namely a spurt in household formation - was dead wrong. Sure enough, as has been confirmed empirically, the only reason for the latest dead cat bounce in home prices has been the Fed, and banks complicit in engaging in "foreclosure stuffing." And while it was easy to deflect the topic of just what is driving the housing market (because none of the bulls would want to admit it is just another credit and liquidity-driven bubble) for over a year, with the traditional "things will be back to normal soon" fall back used every time, as time passed and none of the traditional ingredients for a housing recovery fell into place, some started scratching their heads. This came to a boiling point today, when real-estate firm Trulia, looking at the latest Census Bureau data on household formation, finally threw in the towel and rang the panic button as not only have young Americans set anchor in their parents' basement, but even refuse to get a job.
That, and the "foreclosure stuffing" of course, with 53% of vacant homes helf off the market, "the highest share since before the bubble."
Below, courtesy of Bloomberg, is the summary of what Trulia chief economist Jed Kolko wrote in a note.
Census 3Q homeownership, vacancy survey shows household formation “alarmingly slow,” vacancies “remain stubbornly high,” Trulia chief economist Jed Kolko writes in note.
"Slow household formation number is one of the most alarming housing indicators to come out this year"
Share of millennials living with their parents rose to 31.6% vs 31.4% y/y
Household formation 380k in yr leading up to 3Q vs L-T “normal” increase of 1.1m
No increase over past yr in young adults moving out of parents homes or getting jobs is “most worrying”
Vacant homes still pose “problem” for recovery
53% of vacant homes were held off mkt in 3Q, highest share since before bubble
10.2% of all housing units are vacant, unchanged y/y, higher than pre-bubble level of 8.9% in 3Q 2001
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3 comments:
read my lips, no new jobs.
Where are all you rental racists now? Nothing to say? Hard to fight hard data on why people can't buy homes.
If you buy a lot, build a new 1,200 sf house with attached garage, landscape it and bring it utilities, it will cost you $200k.
The same houses are up for sale on every block for $120k.
Nobody is buying either, because they don't know how stable their job is, if they even have one.
Obamacare will now cost more than a mortgage payment.
Nobody is buying that, either.
Get it yet?
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