A red flag in housing echoes one in the used car market.
Following yesterday’s dismal housing starts and building permits prints (which followed an ugly homebuilder sentiment signal), analysts expected US existing home sales to tumble 5.2% MoM in November. In fact, things were worse with a 7.7% MoM plunge (the biggest drop since Feb 22 and the 10th straight monthly decline). This is the biggest YoY drop since Lehman and the longest streak of sales declines since 1999… This disappointing drop in existing home sales happened despite the fact that mortgage rates have now fallen for 5 straight weeks.
The US economy is not looking great at the moment.