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New home sales rebound, but builders are still wary

My rule of thumb for anticipating homebuilder behavior is based on the three-month average of housing supply.
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Today the Census Bureaus new home sales report came in as a beat of estimates at 811,000. The headline beat surprised many people, but the report’s internals show negative revisions for the previous months. The bearish take on housing for the second half of 2021 didn’t really pan out, especially in the new home sales sector.

What I believe occurred is that some housing investors took the decline in builders confidence and the increase in monthly supply to push that something bad was going to occur quickly. In reality, as we talked about many times on HousingWire, housing data was going to moderate, find a base and work from that COVID-19 surge in the data.

Now that 2021 is wrapped up, we can see this is what happened and I believe that was misread by some people. However, with that said, it’s still just an OK housing market for me based on how I view the new home sales market. Not everything in housing has to be smoking hot or an epic crash — a slow and steady dance can make the evening just right.

From Census: The seasonally adjusted estimate of new houses for sale at the end of December was 403,000.  This represents a supply of 6.0 months at the current sales rate.

My rule of thumb for anticipating builder behavior is based on the three-month average of supply:

  • When supply is 4.3 months and below, this is an excellent market for the builders.
  • When supply is 4.4 to 6.4 months, this is an OK market for the builders. They will build as long as new home sales are growing.
  • When supply is 6.5 months and above, the builders will pull back on construction.

The headline supply number is six months with a three-month average number of 6.6 months. While we have seen a monthly decline in supply, we always want to keep mindful of the three-month average because the month-to-month numbers can be wild, both positive and negative.



Of course, we all know what is going on in the U.S.: it’s taking forever to build and complete a home. The saddest housing chart we have in America is the total completion chart for housing starts. It is an embarrassment, but construction productivity — which has been terrible for decades — is now also dealing with shortages that delay finishing homes. Also, since robots and immigrants didn’t take all the jobs in America, we have a higher-than-normal level of job openings for construction workers. 



The new home sales market is doing its slow and steady dance upward, which is typically the case as long as mortgage rates stay low. This isn’t a booming home sales market and the existing home sales have clearly been outperforming recently versus the new home sales.

From Census: New Home Sales Sales of new single‐family houses in December 2021 were at a seasonally adjusted annual rate of 811,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 11.9 percent (±20.3 percent)* above the revised November rate of 725,000, but is 14.0 percent (±16.6 percent)* below the December 2020 estimate of 943,000



Slow and steady wins the race and the market that we had from 2002-2005 doesn’t exist today. The credit boom that facilitated new home sales then no longer exists, so while sales levels are nowhere near the peak of the housing bubble years, this should be viewed as a positive because we never want to see a credit boom as we did back then.

Now for some good news, growth of the median sales price has slowed down!

My biggest concern for housing in the years 2020-2024 was about home prices having the capacity to overheat in the existing home sales market. Here on the new home sales side of the equation, it’s all about pricing power and profit margins. The builders had the ability to push higher prices on the consumers as the demand was there. So for all the complaints about labor and lumber costs, the builders sold their homes at higher prices and made good money off them. This is also a factor why I don’t believe in the housing construction boom premise, because when builders and sellers have pricing power they push it to the limits.

From Census: The median sales price of new houses sold in December 2021 was $377,700.  The average sales price was $457,300.



Even though the recent builder survey saw a slight drop, it picked up over the last few months of 2021, so the builders were feeling a bit perkier and sales rose, as well as permits. I believe some of the marketing that housing was going to crash in the second half of 2021 didn’t end well because simply rates are too low and demographic demand is too big.

Now the pressing question is: What will the 10-year yield do? I believe, as I have since the summer of 2020, if you want housing to cool down you need the 10-year yield to break above 1.94% and head much higher with duration. Of course, this is something that hasn’t happened since the second half of 2019 after the inverted yield curve. That cooling process is to allow days on market to grow and create a balance for the existing home sales market.

Unlike last year, where I didn’t even address the possibility of that happening, for 2022 I have talked about how bond yields could rise above 1.94%, but we would need global yields to rise with it. From my article last week: “For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.”

Germany and Japan’s 10-year yields have been rising lately, but still not enough yet to get our 10-year yield to even really test the 1.94% level just yet.

Higher bond yields and higher mortgage rates really impact the new home sales market more than the existing home sales market. So, if the 10-year yield closes above 1.94% and heads toward 2.42%, creating 4% plus mortgage rates, the first sector you want to keep an eye on is the new home sales sector.

Today’s headline number beat surprised a lot of people, but the revisions to previous sales have been negative (see here for that déjà vu). On top of negative revisions, it is still taking too long to complete a new home in America. The builder has passed on a lot of costs onto the consumer, so they will be mindful of that 10-year yield as well.

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Submitted by Liam Cosgrove

Former…

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Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Submitted by Liam Cosgrove

Former Project Veritas & O’Keefe Media Group operative and Pfizer formulation analyst scientist Justin Leslie revealed previously unpublished recordings showing Pfizer’s top vaccine researchers discussing major concerns surrounding COVID-19 vaccines. Leslie delivered these recordings to Veritas in late 2021, but they were never published:

Featured in Leslie’s footage is Kanwal Gill, a principal scientist at Pfizer. Gill was weary of MRNA technology given its long research history yet lack of approved commercial products. She called the vaccines “sneaky,” suggesting latent side effects could emerge in time.

Gill goes on to illustrate how the vaccine formulation process was dramatically rushed under the FDA’s Emergency Use Authorization and adds that profit incentives likely played a role:

"It’s going to affect my heart, and I’m going to die. And nobody’s talking about that."

Leslie recorded another colleague, Pfizer’s pharmaceutical formulation scientist Ramin Darvari, who raised the since-validated concern that repeat booster intake could damage the cardiovascular system:

None of these claims will be shocking to hear in 2024, but it is telling that high-level Pfizer researchers were discussing these topics in private while the company assured the public of “no serious safety concerns” upon the jab’s release:

Vaccine for Children is a Different Formulation

Leslie sent me a little-known FDA-Pfizer conference — a 7-hour Zoom meeting published in tandem with the approval of the vaccine for 5 – 11 year-olds — during which Pfizer’s vice presidents of vaccine research and development, Nicholas Warne and William Gruber, discussed a last-minute change to the vaccine’s “buffer” — from “PBS” to “Tris” — to improve its shelf life. For about 30 seconds of these 7 hours, Gruber acknowledged that the new formula was NOT the one used in clinical trials (emphasis mine):


“The studies were done using the same volume… but contained the PBS buffer. We obviously had extensive consultations with the FDA and it was determined that the clinical studies were not required because, again, the LNP and the MRNA are the same and the behavior — in terms of reactogenicity and efficacy — are expected to be the same.

According to Leslie, the tweaked “buffer” dramatically changed the temperature needed for storage: “Before they changed this last step of the formulation, the formula was to be kept at -80 degrees Celsius. After they changed the last step, we kept them at 2 to 8 degrees celsius,” Leslie told me.

The claims are backed up in the referenced video presentation:

I’m no vaccinologist but an 80-degree temperature delta — and a 5x shelf-life in a warmer climate — seems like a significant change that might warrant clinical trials before commercial release.

Despite this information technically being public, there has been virtually no media scrutiny or even coverage — and in fact, most were told the vaccine for children was the same formula but just a smaller dose — which is perhaps due to a combination of the information being buried within a 7-hour jargon-filled presentation and our media being totally dysfunctional.

Bohemian Grove?

Leslie’s 2-hour long documentary on his experience at both Pfizer and O’Keefe’s companies concludes on an interesting note: James O’Keefe attended an outing at the Bohemian Grove.

Leslie offers this photo of James’ Bohemian Grove “GATE” slip as evidence, left on his work desk atop a copy of his book, “American Muckraker”:

My thoughts on the Bohemian Grove: my good friend’s dad was its general manager for several decades. From what I have gathered through that connection, the Bohemian Grove is not some version of the Illuminati, at least not in the institutional sense.

Do powerful elites hangout there? Absolutely. Do they discuss their plans for the world while hanging out there? I’m sure it has happened. Do they have a weird ritual with a giant owl? Yep, Alex Jones showed that to the world.

My perspective is based on conversations with my friend and my belief that his father is not lying to him. I could be wrong and am open to evidence — like if boxer Ryan Garcia decides to produce evidence regarding his rape claims — and I do find it a bit strange the club would invite O’Keefe who is notorious for covertly filming, but Occam’s razor would lead me to believe the club is — as it was under my friend’s dad — run by boomer conservatives the extent of whose politics include disliking wokeness, immigration, and Biden (common subjects of O’Keefe’s work).

Therefore, I don’t find O’Keefe’s visit to the club indicative that he is some sort of Operation Mockingbird asset as Leslie tries to depict (however Mockingbird is a 100% legitimate conspiracy). I have also met James several times and even came close to joining OMG. While I disagreed with James on the significance of many of his stories — finding some to be overhyped and showy — I never doubted his conviction in them.

As for why Leslie’s story was squashed… all my sources told me it was to avoid jail time for Veritas executives.

Feel free to watch Leslie’s full documentary here and decide for yourself.

Fun fact — Justin Leslie was also the operative behind this mega-viral Project Veritas story where Pfizer’s director of R&D claimed the company was privately mutating COVID-19 behind closed doors:

Tyler Durden Tue, 03/12/2024 - 13:40

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Association of prenatal vitamins and metals with epigenetic aging at birth and in childhood

“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging…

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“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”

Credit: 2024 Bozack et al.

“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”

BUFFALO, NY- March 12, 2024 – A new research paper was published in Aging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 16, Issue 4, entitled, “Associations of prenatal one-carbon metabolism nutrients and metals with epigenetic aging biomarkers at birth and in childhood in a US cohort.”

Epigenetic gestational age acceleration (EGAA) at birth and epigenetic age acceleration (EAA) in childhood may be biomarkers of the intrauterine environment. In this new study, researchers Anne K. Bozack, Sheryl L. Rifas-Shiman, Andrea A. Baccarelli, Robert O. Wright, Diane R. Gold, Emily Oken, Marie-France Hivert, and Andres Cardenas from Stanford University School of Medicine, Harvard Medical School, Harvard T.H. Chan School of Public Health, Columbia University, and Icahn School of Medicine at Mount Sinai investigated the extent to which first-trimester folate, B12, 5 essential and 7 non-essential metals in maternal circulation are associated with EGAA and EAA in early life. 

“[…] we hypothesized that OCM [one-carbon metabolism] nutrients and essential metals would be positively associated with EGAA and non-essential metals would be negatively associated with EGAA. We also investigated nonlinear associations and associations with mixtures of micronutrients and metals.”

Bohlin EGAA and Horvath pan-tissue and skin and blood EAA were calculated using DNA methylation measured in cord blood (N=351) and mid-childhood blood (N=326; median age = 7.7 years) in the Project Viva pre-birth cohort. A one standard deviation increase in individual essential metals (copper, manganese, and zinc) was associated with 0.94-1.2 weeks lower Horvath EAA at birth, and patterns of exposures identified by exploratory factor analysis suggested that a common source of essential metals was associated with Horvath EAA. The researchers also observed evidence of nonlinear associations of zinc with Bohlin EGAA, magnesium and lead with Horvath EAA, and cesium with skin and blood EAA at birth. Overall, associations at birth did not persist in mid-childhood; however, arsenic was associated with greater EAA at birth and in childhood. 

“Prenatal metals, including essential metals and arsenic, are associated with epigenetic aging in early life, which might be associated with future health.”

 

Read the full paper: DOI: https://doi.org/10.18632/aging.205602 

Corresponding Author: Andres Cardenas

Corresponding Email: andres.cardenas@stanford.edu 

Keywords: epigenetic age acceleration, metals, folate, B12, prenatal exposures

Click here to sign up for free Altmetric alerts about this article.

 

About Aging:

Launched in 2009, Aging publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

Please visit our website at www.Aging-US.com​​ and connect with us:

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Click here to subscribe to Aging publication updates.

For media inquiries, please contact media@impactjournals.com.

 

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