Housing is bad... but not that bad (Part III)

A weak durable goods report got the bond market all juiced up this morning, pushing the 10-year below 4.50% briefly. But at 10AM, a better-than-expected Existing Home Sales figure took a bit of the wind out of the market's sail, and the 10-year is now only up 3 ticks.

Now I know this is going to be hard to believe, but existing home sales actually increased in October to 6.24 million up from a revised 6.21 million. We know that there will come a time where housing activity stabilizes. When that might be and at what levels remains to be seen. But looking at existing sales, the last 4 prints have been 6.33, 6.30, 6.21, 6.24.

Seems to me that if existing homes are moving at a consistent pace, then the market has found a clearing price. If that's right, then prices should recover as the new home inventory is worked off.

I don't think four prints from existing home sales is enough to reach the above conclusion, but by the time we actually have enough data to reach that conclusion, the market will have already moved. So I'm putting my money on a soft landing.