Collapsedachusetts Existing Home Sales Preview: March 2008

Sources inside the Massachusetts Association of Realtors (MAR) report that next week’s monthly existing home sales results will show that March single family home sales crashed 32.3% on a year-over-year basis while condo sales collapsed a stunning 38.0% over the same period.

Further, the single family median selling price declined a whopping 8.4% on a year-over-year basis to $315,000 while the condo median selling price slumped 5.3% to $263,750.

It’s also important to note that the March single family home sales count was the lowest March count on record since 1992 and at 2339 units sold was 34.11% below the record March peak set in March 2006.

As for the Multi-Family market (a good indicator of the plight of the investor-speculator), MAR reports that statewide sales declined 20% in the first quarter of 2008 with a 30.5% decline seen in the Greater Boston area resulting in a TRULY STUNNING 28.4% decline to the median selling price on a year-over-year basis.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that March 2008 is registering a home sales count well below even the 2007 level as well as indicating that the April’s results will likely be well below 3000 units, a significant decline.


After over two years of declining home sales, weakening home prices and now looming recession it appears that Massachusetts has just entered the price “free-fall” phase of the housing decline where home prices continuously drop even through the spring months which are typically strong in the region.

Stay tuned as next week the S&P/Case-Shiller home price index results will be available for Boston likely showing the most significant decline in the last 12 months.

Confidence Game: Consumer, CEO and Investor Confidence April 2008 (Final)

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators into a combined presentation that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Today’s final release of the Reuters/University of Michigan Survey of Consumers for April confirmed another startling plunge in consumer sentiment to a reading of 62.6, a decline of 28.13% compared to April 2007.

Further, the survey disclosed that 70% of consumers plan to use their “rebate” checks to either pay down debt or save in an attempt to cope with the current economic uncertainty.

It’s important to note that this is the lowest consumer sentiment reading seen since the recessionary period of March 1982 which, according to many metrics most notably employment, was the most severe recession seen in the U.S. since the Great Depression.

The Index of Consumer Expectations (a component of the Index of Leading Economic Indicators) fell to 53.3, the lowest reading since November 1990’s recessionary environment, 29.78% below the result seen in April 2007 and 39.16% below the most recent peak set in January 2007.

As for the current circumstances, the Current Economic Conditions Index fell to 77, the lowest reading since January 1983, 26.39% below the result seen in April 2007.

As you can see from the chart below (click for larger), the consumer sentiment data is a pretty good indicator of recessions leaving the recent declines possibly predicting rough times ahead.

The latest quarterly results (Q1 2008) of The Conference Board’s CEO Confidence Index fell to a value of 38 the lowest readings since the recessionary period of the dot-com bust.

It’s important to note that the current value has fallen to a level that would be completely consistent with economic contraction suggesting the economy is either in recession or very near.

The April release of the State Street Global Markets Index of Investor Confidence indicated that confidence for North American institutional investors decreased 4.9% since March while European and Asian investor confidence both declined all resulting in a drop of 4.4% to the aggregate Global Investor Confidence Index.

Given that that the confidence indices purport to “measure investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors”, it’s interesting to consider the performance surrounding the 2001 recession and reflect on the performance seen more recently.

During the dot-com unwinding it appears that institutional investor confidence was largely unaffected even as the major market indices eroded substantially (DJI -37.9%, S&P 500 -48.2%, Nasdaq -78%).

But today, in the face of the tremendous headwinds coming from the housing decline and the mortgage-credit debacle, it appears that institutional investors are less stalwart.

Since August 2007, investor confidence has declined significantly led primarily by a material drop-off in the confidence of investors in North America.

The charts below (click for larger versions) show the Global Investor Confidence aggregate index since 1999 as well as the component North America, Europe and Asia indices since 2007.

New Home Sales: March 2008

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for March showing an acceleration of the deterioration in demand for new residential homes across every tracked region resulting in a 36.63% year-over-year decline and a truly whopping 62.13% peak sales decline nationally.

Additionally, sales declined significantly on a month-to-month and year-over-year basis both nationally and across every region resulting in a median selling price decline of a whopping 13.33%.

It’s important to keep in mind that these dramatic declines are coming on the back of the significant declines seen in 2006 and 2007 further indicating the enormity of the housing bust and clearly dispelling any notion of a bottom being reached.

Additionally, although inventories of unsold homes have been dropping for twelve straight months, the sales volume has been declining so significantly that the sales pace has now stands at an astonishing 11.0 months of supply.

The following charts show the extent of sales declines seen since 2005 as well as illustrating how the further declines in 2008 are coming on top of the 2006 and 2007 results (click for larger versions)


Look at the following summary of today’s report:

National

• The median price for a new home was down 13.33% as compared to March 2007.
• New home sales were down 36.6% as compared to March 2007.
• The inventory of new homes for sale declined 14.6% as compared to March 2007.
• The number of months’ supply of the new homes has increased 32.5% as compared to March 2007 and now stands at 11.0 months.

Regional

• In the Northeast, new home sales were down 64.6% as compared to March 2007.
• In the Midwest, new home sales were down 50.0% as compared to March 2007.
• In the South, new home sales were down 25.9% as compared to March 2007.
• In the West, new home sales were down 39.3% as compared to March 2007.

Mid-Cycle Meltdown?: Jobless Claims April 24 2008

Today, the Department of Labor released their latest read of Joblessness showing seasonally adjusted “initial” unemployment claims decreased 33,000 to 342,000 from last week’s revised 375,000 claims and “continued” claims declined 65,000 resulting in an “insured” unemployment rate of 2.2%.

It’s very important to understand that today’s report continues to reflect employment weakness that is wholly consistent with past recessionary episodes and that unequivocal clarity will more than likely come in the next few releases.

Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.

The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967 and from 2000.

As you can see, acceleration to claims generally precedes recessions.


Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).


In the above charts you can see, especially for the last three post-recession periods, that there has generally been a steep decline in unemployment claims and the unemployment rate followed by a “flattening” period of employment and subsequently followed by even further declines to unemployment as growth accelerated.

This flattening period demarks the “mid-cycle slowdown” where for various reasons growth has generally slowed but then resumed with even stronger growth.

So, looking at the post-“doc com” recession period we can see the telltale signs of a potential “mid-cycle” slowdown and if we were to simply reflect on the history of employment as an indicator of the health and potential outlook for the wider economy, it would not be irrational to conclude that times may be brighter in the very near future.

But, adding a little more data I think shows that we may in fact be experiencing a period of economic growth unlike the past several post-recession periods.

Look at the following chart (click for larger version) showing “initial” and “continued” unemployment claims, the ratio of non-farm payrolls to non-institutional population and single family building permits since 1967.

INSERT MIDCYCLE CHART

One notable feature of the post-“dot com” recession era that is, unlike other recent post-recession eras, job growth has been very weak, not succeeding to reach trend growth as had minimally accomplished in the past.

Another feature is that housing was apparently buffeted by the response to the last recession, preventing it from fully correcting thus postponing the full and far more severe downturn to today.

I think there is enough evidence to suggest that our potential “mid-cycle” slowdown, having been traded for a less severe downturn in the aftermath of the “dot-com” recession, may now be turning into a mid-cycle meltdown.

Socializing The Loss: Carrying To and Fro

Here’s another beauty…

Not to be left out of the fun of robbing "Main Street" (middleclass taxpayers and everyone else) blind to bailout Wall Street, the IRS today announced that it will change (and/or not enforce) regulations to allow Wall Street finance and mortgage lending firms to count losses on delinquent mortgages (or foreclosed and all other mortgage losses) against their ordinary income.

Better still, this change fits perfectly with recent legislation proposed in the Senate that would expand “carry back” and “carry forward” rules to allow these losses to be “carried back” as much as four years, meaning the losses could be applied against regular income for any of the last four tax years and also “carried forward” to future tax years.

So effective immediately Wall Street lending and other financial firms, including Fannie Mae and Freddie Mac, can seek refunds for these losses going back two years and, if the Senate bill is approved and passed as law, an additional two years.

Here’s my favorite quote from the Bloomberg piece that noted that to date, 70 of the world's biggest banks, securities firms and mortgage companies have taken about $290 billion in asset write-downs and credit losses since the beginning of 2007:

``This is a serious windfall,'' said Christopher Whalen, managing director of Hawthorne, California-based Institutional Risk Analytics. ``Essentially, the Street gets a $290 billion tax shelter they did not have available'' under the earlier IRS position.

The Almost Daily 2¢ - Hitting The Wall

It should come as no surprise to regular readers to learn that I spend an unusual amount of time paging through county deed transactions, reading mortgage contracts and particularly ARM riders in an attempt to better understand the motivation of home sellers.

I generally wait for new listings to come on the market in the series of towns I monitor and then look up the records to see if some sign of stress or other factor may be apparent.

Maybe it’s a bit snoopy or even a little underhanded but it is very compelling and quite possibly serves as the only method available to get a sense of what’s truly driving the supply side of the existing home market.

From what I have seen to date, particularly in the last six to twelve months, I think it’s safe to say that at least half of existing single family home listings in the Boston metro area are motivated by some sort of financial stress specifically related to the homes themselves. (as opposed to the typical stressful motivating factors such as deaths and divorces which can be also be clearly discerned from the records)

First, there are MANY instances of homes that show lots of re-finance activity (2 – 3 refinances since the purchase in just the last couple of years) being finally secured with an ARM loan and, in many cases, really unscrupulous ARM loans with bad provisions. (i.e. high rates with some that never adjust downward from the unusually high initial rate).

Another pattern occurring in unexpected numbers are homes in which the prior deed transaction indicated that it was a transfer of property between family (nominal $1 transactions) with no mortgages THEN showing a slew of mortgage activity… it seems the draw of easy equity money was just too much for many who’s parents, sadly, worked a substantial portion of their lifetimes paying down the original debt.

Yet another example are many homes, just newly listed, with asking prices very close and even lower than the price the seller paid just one to three years ago.

Finally, there are properties with multiple missed tax payments and of course there are always the properties that are in some stage of the foreclosures processes.

I believe that this in part explains at least some of what’s behind the current lack of inventory of single family homes in the Boston area and may additionally serve to represent a somewhat similar process playing out across the country.

I think that many, especially more affluent, “homeowners” are only selling when they hit the wall.

They are holding out as best they can but eventually they have to face reality and make some changes.

This also dovetails nicely with the recent Zogby/AOL Real Estate Survey which showed that fully 22% of participants indicated that they would lose their home with only a short unexpected job loss and that 30% work paycheck to paycheck to simply pay their housing costs.

To sum this all up… I think that the majority of foreclosure and distressed selling we have seen to date only reflects the bleeding edge of “homeowners” and housing speculators with the worst most toxic loans and most problematic circumstances.

But I believe a large percentage of typical American households have been holding on for dear life.

This explains the unusually low results seen in the various consumer sentiment surveys as well as the dramatic pullback in discretionary and now even non-discretionary spending.

Given that there is a pretty solid possibility that this time next year national unemployment will be nearing, if not have surpassed 7%, I think it’s safe to say that the real challenges truly lay ahead.

Reading Rates: MBA Application Survey – April 23 2008

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 30 basis point since last week to 6.04% while the purchase application volume decreased by 6.4% and the refinance application volume plunged 20.2% compared to last week’s results.

It’s important to note that the average interest rate on an 80% LTV 30 year fixed rate loan is now within the range seen throughout 2007 while the interest rate for an 80% LTV 1 year ARM remains elevated now resting 98 basis points ABOVE the rate of an average 80% LTV 30 year fixed rate loan despite all the herculean efforts by the Federal Reserve to bring rates down.

Also note that all application volume values reflect only “initial” applications NOT approved applications… i.e. originations… actual originations would likely be notably lower than the applications.

The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since November 2006.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).


The following charts show the Purchase Index, Refinance Index and Market Composite Index since November 2006 (click for larger versions).

The Almost Daily 2¢ - Economy Ain’t Lovin’ It

Man, you know things are bad off when American’s pull back from the dollar menu.

Today, McDonald’s (NYSE:MCD) reported that for Q1, total U.S. revenue grew at the slowest pace in at least five years while the “rest of world” revenue grew strongly.

In fact, in “real” (inflation adjusted) terms, U.S. revenue actually showed its first annual decline in at least 5 years.

Even though there is a strong seasonal factor, with a most growth occurring during the second and third quarters (click on chart below for larger version), the Q1 deceleration is significant indicating a real pullback.

I think this is just another indication that consumers are seriously strapped since even though McDonald’s could have represented a sort of trade down during an economic slowdown, today’s results seem to indicate that American consumers are even cutting back on cheap fast food.

Existing Home Sales Report: March 2008

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for March further confirming, perfectly clearly, the tremendous weakness in the demand of existing residential real estate with both single family homes and condos declining uniformly across the nation’s housing markets.

Although this continued falloff in demand is mostly occurring as a result of the momentous and ongoing structural changes taking place in the credit-mortgage markets, consumer sentiment surveys are continuing to indicate that consumers are materially feeling the current recessionary trend which will likely result in even further significant sales declines to come.

Furthermore, we are now seeing solid declines to the median sales price for both single family homes and condos across virtually every region with the most notable occurring in the West showing a decline of 14.9% to the median single family home sales price and a decline of 18.3% to the median condo price.

In a truly ridiculous turn of events, NAR now is arguing that overly “restrictive” lending practices, such as down-payments, are taking their toll on home sales.

NAR senior economist Lawrence Yun sees this “restriction” contributing to the fall off in home sales particularly in the worse off markets.

“Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets, ... At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”

Meanwhile NAR president Dick Gaylord, suggests that 20% down-payments may simply be unnecessary.

“It appears there is some over-reaction on the part of some lenders now in requiring higher downpayment percentages than may be necessary,”

Too bad for the Realtors though since lending standards will only get more restrictive as lenders further realize losses from subprime, alt-a, prime Jumbo and even prime conforming loans.

The era of FICO driven “slam-dunk” lending is coming to a close and with it will inevitably go all the absurdities leaving borrowers and the real estate industry, if they are lucky, to simply operate in an environment of the traditional “rule of thumb” requirements of substantial down-payments and sensible earnings to debt ratios.

The latest report provides, yet again, truly stark and total confirmation that the nation’s housing markets are declining dramatically with EVERY region showing significant double digit declines to sales of BOTH single family and condos as well as increases to inventory and a continued explosion in monthly supply as a result of the collapsing pace of sales.

Keep in mind that these declines are coming “on the back” of TWO SOLID YEARS of dramatic declines further indicating that the housing markets are truly in the process of a tremendous correction.

The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007 and 2008 as well as national existing home inventory and month supply.






Below is a chart consolidating all the year-over-year changes reported by NAR in their most recent report.

The Almost Daily 2¢ - Recession Era Ramblings

Now that we are likely several months into the latest recessionary contraction it seems fitting to start to consider some of the known and possibly not so well known factors that may contribute to the severity of this period.

Rather than go into a lengthy analytical survey of some housing and economic data with charts showing correlations and past recessionary periods and the like, let’s instead simply consider some aspects of our current circumstances and then speculate a bit in an attempt to flesh out some perspective.

First, it’s important to consider that housing slumps are very large macroeconomic events.

For all the perpetual talk of “bottoming” and potential signs of recovery materializing in this half or that half of the year, there is no evidence to suggest that housing has ever experienced a quick bounce back after a tumultuous slowdown.

To the contrary, significant corrections in housing are generally associated with prolonged periods of stale growth where home price appreciation stalls while the general economy struggles to regain its footing, overcoming troublesome issues like high unemployment, problematic inflation, structural changes in lending markets and so on.

In a sense, the economy will first need to become truly healthy again and, even further, show signs of prospective growth before housing can re-establish any form of sustained price appreciation.

Considering that we are only just on the verge of this recession and that unemployment has only just begun its ascent, I believe that a sustained recovery in housing is more than a long way off and moreover that the true tests lay perilously ahead.

Substantial and sustained unemployment has the potential to change the face of the downturn in a way that’s far more significant than can be the result of an epidemic of “you walk away” mentality.

We know that many millions of American households are over-leveraged, having swilled at the trough of easy credit for decades with the final outsized gorging culminating with the housing mania, but what is not as well known is the current households ability to maintain through a prolonged bout of unemployment.

My hunch is that the typical household, especially the middle-class dual income professional household, is woefully unprepared.

One of the more destructive side effects of the housing run-up may be that dual income households are now extremely reliant on both incomes to make ends meet.

So rather than two sources on income diluting the risk of unemployment as would have been the case if households lived well within their means, dual income status may, in fact, result in a greater risk of insolvency for households that scaled their lifestyle to meet (or even exceed) their combined earnings.

Another point to consider is that with the 72% services-based economy may come a foible of specialization.

Professional service workers today are likely far less able (and willing) than past generations to generate equivalent income in another discipline should their primary role go unneeded.

Although American workers are all likely capable of retraining, any significant disruption to any professional services sector may result in a long and arduous period of retooling for unneeded workers.

In a sense, all I’m suggesting is that past generations of more common laborers (manufacturing, etc.) could find similar pay for work of other sorts that relied primarily on their willingness to toil physically, whereas today’s workers specialize in one business process or another and quite possibly could be completely unprepared, both psychologically and in skill, for a significant change of career.

So what would happen if through this downturn there is a further realization that many service sector jobs are simply unnecessary? (…as an aside, Scott Adams Dilbert strip always seems funny to me particularly because, like all good comedy, its parody is essentially true.)

I think this is a real threat and the anemic employment growth seen since the dot-com bust, I believe substantiates this potential.

For the first time in at least 60 years, a post recessionary expansion has failed to (adjust for population) re-populate payrolls to at least meet the trend defined by prior expansions before turning lower again in the face of the next recession and although there may be alternative explanations (aging population, independent workers, etc.) I believe it is really a reflection of an economy that was NOT fundamentally growing but in fact simply being propped up by cheap debt.

Worse yet, all that debt filtered through the system and are now the obligation of weak firms and even weaker households.

Countrywide Foreclosures: March 2008

Countrywide Financial (NYSE:CFC) announced recently (unbeknownst to me until today) that they will no longer provide press releases detailing their monthly operational status as they had been doing for many years.

Instead we will only get a quarterly peer the “mess that Mozilo built” which is certainly a loss for those looking to gain a serious understanding of how bad the state of the mortgage industry is but I suppose a bit of a gain for Countrywide.

One has to wonder how much credibility is due a company (or its bank suitor) that proudly reports its operational results when times are good but then works to prevent transparency when business goes south.

By making such a weak and cowardly decision, the management of Countrywide Financial and Bank of America (NYSE:BAC) are clearly demonstrating that conditions are deteriorating fast and likely far worse than had been originally reported leaving them to attempt “damage control” rather than present the reality.

Not to fret though as in the interim month’s Ill attempt to estimate their monthly foreclosure and delinquency rate based on the existing growth rate and seasonal trend as well as the strong correlation of Fannie Mae monthly operational results.

Check back as Ill have an “estimation” post prepared soon.

Follow The Leader: Index of Leading Economic Indicators March 2008

Today’s results of the Conference Board’s Index of Leading Economic Indicators continues to indicate troubled times ahead increasing a tepid 0.1% from February’s revised level resulting in a decline of 2.02% on a year-over-year basis, leaving the index at 102.

It’s important to note that a year-over-year decline greater than 1.5% has ONLY preceded EVERY recession that has occurred in the last 59 years so the six significant consecutive year-over-year declines strongly suggests that overall the components of the index are indicating that recession is either here or very near.

Note that with today’s release The Conference Board has incorporated its annual benchmark revision to the complete series.

Philadelphia Feeling: Federal Reserve Bank of Philadelphia Business Outlook Survey April 2008

Today, the Federal Reserve Bank of Philadelphia released the results of their Business Outlook Survey for April showing renewed weakness to the regions manufacturing sector with the current activity index deteriorating to -24.9 from March’s -17.40, the fifth consecutive negative monthly result clearly indicating contraction is underway.

The survey of the Philadelphia regions manufacturing sector has been a pretty solid leading indicator of the overall strength or weakness and recession experienced by general economy.

As you can see by the following chart (click for larger version), during the past three post-recession expansion periods, the “current” diffusion index (more on diffusion indices later) generally vacillated between 0 and 35 while the “future” index left the period of contraction at an elevated level and eventually joining the “current” index.

Finally, as the economy pushes closer to contraction, both indices decline dramatically with a breach of -20 by the “current” index generally indicating that recession is upon us.




As you can see from last month’s results, -20 has been breached by the “current” index which now stands at -17.40 while the “future” index stands at -0.5.

Clearly, there is trouble afoot but components of the latest results also display a potential dangerous parallel to the stagflationary eras of the 70s and early 80s.

The following chart shows the latest results of the “current new orders” “current prices paid” and “future employment” components (click for larger versions).



Notice that while current orders and future employment declined, current prices paid have increased indicating a potential return to a stagflationary environment that hasn’t been seen since the early 80s.

It’s important to note that these three indicators have moved, more or less, together since the expansion of 1983 and have especially moved together during the recessionary periods of 1990 and 2001.

Now though, it appears that we may be seeing a divergence with an increase in prices paid and simultaneous decrease in growth.

The following chart (click for larger) shows these measures during the last stagflationary era seen between 1976 – 1980. Notice the clear divergence of rising prices and falling growth.

Mid-Cycle Meltdown?: Jobless Claims April 17 2008

Today, the Department of Labor released their latest read of Joblessness showing seasonally adjusted “initial” unemployment claims increasing 17,000 to 372,000 from last week’s revised 406,000 claims and “continued” claims increased 26,000 resulting in an “insured” unemployment rate of 2.2%.

It’s very important to understand that today’s report continues to reflect employment weakness that is wholly consistent with past recessionary episodes and that unequivocal clarity will more than likely come in the next few releases.

Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.

The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967 and from 2000.

As you can see, acceleration to claims generally precedes recessions.


Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).


In the above charts you can see, especially for the last three post-recession periods, that there has generally been a steep decline in unemployment claims and the unemployment rate followed by a “flattening” period of employment and subsequently followed by even further declines to unemployment as growth accelerated.

This flattening period demarks the “mid-cycle slowdown” where for various reasons growth has generally slowed but then resumed with even stronger growth.

So, looking at the post-“doc com” recession period we can see the telltale signs of a potential “mid-cycle” slowdown and if we were to simply reflect on the history of employment as an indicator of the health and potential outlook for the wider economy, it would not be irrational to conclude that times may be brighter in the very near future.

But, adding a little more data I think shows that we may in fact be experiencing a period of economic growth unlike the past several post-recession periods.

Look at the following chart (click for larger version) showing “initial” and “continued” unemployment claims, the ratio of non-farm payrolls to non-institutional population and single family building permits since 1967.

One notable feature of the post-“dot com” recession era that is, unlike other recent post-recession eras, job growth has been very weak, not succeeding to reach trend growth as had minimally accomplished in the past.

Another feature is that housing was apparently buffeted by the response to the last recession, preventing it from fully correcting thus postponing the full and far more severe downturn to today.

I think there is enough evidence to suggest that our potential “mid-cycle” slowdown, having been traded for a less severe downturn in the aftermath of the “dot-com” recession, may now be turning into a mid-cycle meltdown.