It’s interesting how interconnected our economy is. We measure and watch one part of it hoping for clues as to other parts. Sometimes it feels like science (sometimes it feels like phrenology!)
For example, if we posit that we are near “full employment” or have surpassed the natural rate of unemployment(see, e.g. this report), then housing producers should signal that they are ordering as much as they will, thus driving down input prices (where such prices are based, in part, on future demand.) Does that explain this recent decrease in lumber prices? Have the presumed inputs-cost increases in housing (whether labor or lumber) pushed affordability in a way that limits sales-volume (YoY contracts signings down 2.5%).
Locally, we observed some limiting factors to expanded volume of RE transactions in June-July, previously mentioned in this blog. It seems we are not escaping the national trend (see the Analysis comments here). And yet, July is a prime month of overlap between completion of early-Spring starts and redeployment of capital from closing those completions. In keeping with that, we saw a rise in the Mover’s Moving count we perform each month – up to 154 transactions that meet our criteria. See attached.
It seems from the data, then, that things are good, that we haven’t punched through the absolute ceiling, but that we have a pretty good view of it from here.