The Housing Shortage Is Getting Worse
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- On a jam-packed week of earnings and economic data, the S&P 500 and Nasdaq each climbed to new record highs ahead of next week’s all-important Fed rate decision.
- For the second straight quarter, GDP growth exceeded estimates as strong consumer spending partially offset a dip in business spending, exports, and fixed investment.
- The housing shortage is getting worse. Residential fixed investment was a drag on GDP growth for the sixth straight quarter even as household formations have accelerated.
- The homeowner and rental vacancy rates fell to nearly 40-year lows last quarter as strong demographic trends and a robust job market continue to put upward pressure on housing costs.
- New and existing home sales data was disappointing, but forward-looking metrics – including strong earnings and commentary from the homebuilders – suggests a strong second half of 2019 for housing.
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