Ian Shepherdson Housing Quotations

We remain relatively optimistic about the housing market, but we do accept that activity fell sharply in the immediate aftermath of Sept. 11,

One steep drop in housing starts does not make a downward trend, especially in a month which was very wet in the West and very cold in the Northeast. Still, the data are consistent with other signs of a softening housing market, most notably the drop in homebuilders' confidence. What really matters, though, is whether sales will fall fast enough to turn a softening into a collapse.

No doubt these numbers will be taken by the market as a clear sign of a softening housing market and, by implication, an indication that higher interest rates are biting. We are much more skeptical: housing starts lag home sales, which have been depressed in recent months more by lack of inventory than by higher interest rates.

Our view is that home sales will slide through the summer, dragging housing starts down into the fall. But this is still no more than a forecast; mortgage applications are still very strong.

There is, in short, no sign that the housing market has turned down. The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

There is, in short, no sign that the housing market has turned down, ... The lack of supply of existing homes simply means that prices will rise more quickly -- and with mortgage rates at just over 8 percent, there won't be any slowdown in home sales anytime soon.

Doubtless these numbers will be followed by a rash of commentary to the effect that rumors of the death of the housing market are greatly exaggerated. This would be the wrong conclusion to draw. It is not possible for sales to trend down and starts to trend up.

The revisions are not as big as we feared, ... The new April number shows sales at their lowest level since November, but the previous four months were exceptionally strong, in part due to favorable weather. Given the strong trend in mortgage applications, these data likely do not signal real housing weakness.

A serious downturn in housing activity will have to wait until there is a meaningful increase in mortgage rates, ... For that, we have to wait until payrolls take off and the Fed signals tighter policy.

The renewed strength in home sales reflects lower mortgage rates; we expect rates to dip to a 14-month low this week. The housing rebound will ensure construction sector strength in the first quarter of 2001. No recession here.

Eventually, we do expect housing to lead the economy into a sustained slowdown, but it will take time, and patience is not the markets' most obvious virtue.

Eventually, the housing slowdown will affect retail sales too, but that is probably a story for the spring of next year, at the earliest.

Supply remains tight; buyers may have been unable to find the homes they want where they want them. Housing will not fold.

The wage story is gathering real momentum. The Fed is going to 5%, and more if housing does not collapse by mid-year.

The new Fed Chairman clearly expects to have to raise rates a bit further, but the extent of the tightening is dependent on the relative performance of the labor and housing markets.

The Fed will deal with (the housing-jobs mix) by hiking in January and March and hoping that the housing softening will be sufficient to get them off the hook by May, though I think that's a close call.

In the short-term, these data will reinforce the impression that the housing market is proving resilient in the face of higher mortgage rates, ... it will not last, because the current trend in home sales is not high enough to support this rate of house building in the medium-term.

This hugely strong report will doubtless be cited as evidence that the housing market is not slowing. However, the extremely warm January weather surely distorted these data, just as it boosted retail sales and depressed industrial production.

The housing market is clearly on a roll again, despite the -- probably temporary -- dip in confidence.