Housing Just Gotta Be Like That...

The average monthly mortgage payment is us 62.2% from a year ago, per Zillow... driven by higher mortgage rates and higher house prices.

Mortgage application just hit a 22 year low, per the MBA. You don't need to see that, as I'm sure you can feel it.

Overall existing home sales are dropping now too, per the NAR.

The average price reached a record $416,000 in June, up 13.4% from a year ago. When I started in the mortgage business in the early 90's a jumbo loan was $225,000.

A lack of inventory has been supporting house prices, but now the National Association of Home Builders says builders are slowing down housing starts by 6.3% as compared to last year.

Housing data and job data are huge factors in our economy. They FED will have to weigh inflation impact of higher rates against the negative impact of companies laying off workers who are making house payments and want to buy houses, as all this is incredibly linked together, and that's why banks are starting to pull in liquidity so they have reserves to get through this storm.

Sorry, this was sounding depressing, so I felt I needed to add a cute cat photo.

As you can see below the unemployment rate (left axis) tends to be lead by the health of the housing market by 12 months (right axis). What does that mean? That means you can see the future, when housing starts to do poorly, you are seeing the future of unemployment. Per the chart we are moving toward such a period of higher unemployment, which reinforced negative housing dynamics... which means this is going to last longer than most expect.

TIP: Facts, are facts. Housing is continuing on a course that shows further cooling is likely and usually it is housing that leads us out of more recessions due to its sheer size and force within the economy. This time around, that can't happen unless the FED pivots and lowers rates. Expect this cycle to take another 18 months to work it's way through - prepare and make markets where you can in niche products and solutions.