China home sales slump

China real estate is still in bad shape.

Real Estate: More Sellers Than Buyers

Home prices won't rise much.

Home Builders Vs. Stocks

The XHB Home Builders Index is a leading indicator for stocks.

 

Existing Home Sales Vs. Housing Inventory

When existing home sales drop, the housing inventory rises.

New Home Price Vs. Rent CPI

The price of new homes is a leading indicator for rent CPI. If you can't buy a house, you will rent.

Lumber Price Vs. Home Price

This is a graph between lumber prices and home prices. Lumber prices are a leading indicator.

Typically a 2 month delay.

Correlation: Mortgage Rates Vs. Mortgage Applications Vs. Pending Home Sales

Just discovered another correlation on Zero Hedge. If mortgage rates go up, lending becomes more difficult, so people stop applying for new mortgages. This means there is a negative correlation between mortgage rates and mortgage applications.

When mortgage applications go down, not a lot of homes will be sold. This means that home sales will go down. As suggested by the following chart, there is a correlation here between mortgage applications and pending home sales. In fact, mortgage rates/mortgage applications are a leading indicator for pending home sales as presented in this Zerohedge article.

If it's true that interest rates and mortgage rates will go up, you can bet that we will have another housing crisis. Home sales go down. All those homes will be coming onto the market, while nobody wants them.