The Keystone Speculator's Housing Market Indicator; UNITED STATES IS IN A HOUSING RECESSION FOR 37 MONTHS

The US is in a housing recession for 37 months (3 years and 1 month). The Keystone Speculator's Housing Market Indicator signaled the US housing recession starting 12/20/22 with no end in sight yet (although the chart above shows the green and red lines converging). Are you a homeowner or a home moaner? People do not want to leave their current home, that has a low mortgage rate, for a new home with a bigger monthly payment. The lower availability of homes on the market hurts the first-time homebuyers.

The hedge funds have been buying-up homes and multi-units and renting them out for several years. Lately, analysts proclaim that less than 1% of all homes purchased are by hedge funds. That is stupid talk. How did they analyze data? Or did they? Did they just do a search on some hedge fund names and then call it a day? There are always shadow companies doing things on the slide. Joe Fafooshnik Real Estate does not sound like a hedge fund, although it may be tied to one.

The housing recession does not end until the red line moves above the green line. Here is the previous housing recession chart as this series continues until a housing recovery begins but rumor has it that Ricky Recovery is partying with Godot.

As mentioned above, the green and red lines are converging. Thus, mathematicians say thus a lot, and therefore, and hence, and conversely, or maybe that is just Keystone. Looking at the metrics, a projection can be made for the next Housing Starts release that is 2/6/26, but who knows about the date these days as data tries to get back on track after the government shutdown in the Fall. If Housing Starts are 1.340 million units or higher, that is enough to begin a US housing recovery. No one would be happier than King Donnie. If, however, the Starts come in at 1.335 million units or lower, the housing recession continues.

It sounds like Punxsutawney Phil. Groundhog Day is Monday, 2/2/26, in Keystone's neck of the woods in southwestern Pennsylvania, and if Phil sees his shadow, it means 6 more weeks of winter are ahead. If Phil does not see his shadow, spring is around the corner. You can watch early Monday morning to see Phil's prediction.

Anyhoo, the last time that Housing Starts were at that high a number was back in August so it is likely that the housing recession may linger a while longer. It is also the dead of winter so construction activity will not pick up for another couple months. It would be bad if there was a solid deterioration with Housing Starts down to 1.2 million units, or 1.1 million or a million, since that would forecast bad times ahead with a worsening housing recession and likely overall US recession at the doorstep.

How could the United States not be in an overall recession when there is an ongoing housing recession for over 3 years, a labor recession for over 2 years, and a manufacturing recession/slump ongoing for 3 years? What special times. In past decades, that trio of pain would guarantee an overall US economic recession and yet it remains missing (with Godot) and nowhere in sight.

The Godot Recession has not yet arrived despite the weakness in housing, manufacturing and labor. The Federal Reserve provided monetary stimulus and the Congress provided fiscal stimulus during the COVID-19 pandemic that created the 3-year housing recovery. The sales agreements were being signed faster than divorce papers. It was one big party. The banksters were partying giving away loans for houses like candy.

The party ends on 12/20/22 as the housing recession begins. Time will tell if Godot arrives bringing the overall US recession. If consumer spending continues slipping away (after the holiday goose), you will say hello to the Godot Recession and the ongoing housing, labor and manufacturing recessions will say they told you so (for years). It is definitely a different animal this time around.