And you may find yourself living in a shotgun shack
And you may find yourself in another part of the world
And you may find yourself behind the wheel of a large automobile
And you may find yourself in a beautiful house, with a beautiful wife
And you may ask yourself, “Well, how did I get here?”
Same as it ever was, same as it ever was
Same as it ever was, same as it ever was
Same as it ever was, same as it ever was
Same as it ever was, same as it ever was
Those were the lyrics penned by the band the “Talking Heads” in the 1980 hit – Once In A Lifetime.
In high school, I thought that song was really “deep,” but only a few years later I was in a graduate level course called the Philosophy of Biology and I learned two things: (1) the pop music that impressed me in high school was not actually very “deep” (not even The Cure, sadly); and (2) Darwin’s theory of evolution is so riddled with holes that it could likely be thrown out altogether at some point.
Anyway, I bring up the Talking Heads again because the crash bros are trying to terrify us with housing data again – that remains… the same as it ever was.
I am going to hit three topics today and share charts to illustrate my points. The topics are (1) Contact Cancellations, (2) Seller Concessions, and (3) Housing Inventory.
I. Contract Cancellations.
We keep hearing about the surge in contract cancellations – and how that is proof the market is crashing. BUT, cancellation rates are about the same as last year’s, lower than 2023’s, and much lower than 2020’s. They are only about 2% higher than pre-COVID numbers. See the chart below, borrowed shamelessly from MBS Highway.
II. Seller Concessions
We also hear constantly about desperate sellers having to give away the farm in the form of concessions (mostly credits) to sell their homes. But, the percentage of sellers giving concessions is not even at 2023 levels, and only a tad higher than pre-COVID levels. See the chart below, borrowed shamelessly from MBS Highway.
III. Housing Inventory.
THIS IS THE BIGGIE, as it is the data that the crash bros harp on the most. Below is a chart showing inventory levels over the last 26 years – from MBS Highway again. Existing housing inventory is not even back to pre-COVID levels and still remains below normal. And – it is about 1/4 of what we saw around 2008.
EXISTING HOUSING INVENTORY OVER THE LAST 26 YEARS (Source: MBS Highway)
