January 02, 2025 at 05:19PM
Optimism is high for many sectors of the US economy in 2025 but one area that’s slumped since the election is home builders. That’s co-incided with better economic data since September and rising 30-year bond yields.
There is a psychological barrier at 7% that scares away US home buyers and we’re perilously close to that now.
Home builders can accept lower margins and that’s slowly happening now but there is some reluctance and no one likes to see home prices fall. This is a dynamic that’s worth watching because it’s a big part of the economy and it’s been percolating for awhile. Much of the buying in the past two years was predicated on rates coming down later but that’s no longer looking as likely.
This article was written by Adam Button at www.forexlive.com.
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