Housing Falters – Blame The Tax Changes?

Let’s roll into the data, first of all.  The press release is just out:

“(Here are) the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for January 2019 shows that the rate of home price increases across the U.S. has continued to slow.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 4.3% annual gain in January, down from 4.6% in the previous month.

The 10-City Composite annual increase came in at 3.2%, down from 3.7% in the previous month. The 20-City Composite posted a 3.6% year-over-year gain, down from 4.1% in the previous month.

Las Vegas, Phoenix and Minneapolis reported the highest year-over-year gains among the 20 cities. In January, Las Vegas led the way with a 10.5% year-over-year price increase, followed by Phoenix with a 7.5% increase and Minneapolis with a 5.1% increase. Only one of the 20 cities reported greater price increases in the year ending January 2019 versus the year ending December 2018.
The charts on the following page compares year-over-year returns of different housing price ranges (tiers) for the top two cities, Las Vegas and Phoenix. ”

Before seasonal adjustment, the National Index posted a month-over-month decrease of 0.2% in January. The 10-City and 20-City Composites reported 0.3% and 0.2% decreases for the month, respectively. After seasonal adjustment, the National Index recorded a 0.2% month-over-month increase in January. The 10-City Composite did not post any gains, and the 20-City Composite posted 0.1% month-over-month increase. In January, five of 20 cities reported increases before seasonal adjustment, while 14 of 20 cities reported increases after seasonal adjustment.

There was also bad news in the earlier federal report on housing.

The report out earlier pointed out this:

“Housing Starts  Privately?owned housing starts in February were at a seasonally adjusted annual rate of 1,162,000.  This is 8.7 percent (±10.3  percent)* below the revised January estimate of 1,273,000 and is 9.9 percent (±11.5 percent)* below the February 2018 rate of  1,290,000.  Single?family housing starts in February were at a rate of 805,000; this is 17.0 percent (±11.2 percent) below the  revised January figure of 970,000. The February rate for units in buildings with five units or more was 352,000.

Housing Completions  Privately?owned housing completions in February were at a seasonally adjusted annual rate of 1,303,000.  This is 4.5 percent  (±17.8 percent)* above the revised January estimate of 1,247,000 and is 1.1 percent (±18.6 percent)* above the February 2018  rate of 1,289,000.  Single?family housing completions in February were at a rate of 816,000; this is 10.0 percent (±11.0 percent)*  below the revised January rate of 907,000. The February rate for units in buildings with five units or more was 473,000.

What this suggests to me is that Congress – by capping the write off of interest and local taxes – is “killing us softly” with a tax policy enacted well over a year ago amidst much fanfare and hype.

Now we see the results.

While Dow futures are up 119 for the open, we’re becoming skeptical that there’s much room on the upside left.  Housing faltering is a hugely, bigly deal….

14 thoughts on “Housing Falters – Blame The Tax Changes?”

    • I’ll always ultimately defer to George but the flooding in the central U.S. is and will have wide spreading effects in the economy. It’s not over yet and will cause an increase in food prices and other commodities which will be another drag on the economy. I don’t know how much manufacturing has been affected but I’m sure it’s a component in all of this. I’ve advised a friend who wants to retire from ranching to not get rid of his personal heard of livestock for this reason. Couple all of this with George’s warning and observations of a general slow down in our incredibly complex World economy (one that doesn’t know how to live without growth) and you have reasons for slower growth, if not outright contractions, coming out of the bushes toward you in a very unpredictable manner. Sure, there’ll be pockets of growth and prosperity but their time will come as people run out of money to spend for various reasons. Make money while you can if you have insights but stay grounded in reality. The storm IS coming.

  1. Thank you for your comment. You inadvertently verified something for me.

    The term “Salt” in the bible used by Christs disciples and others is almost always a term refering to “Sophia”. Who is the maker of souls.

    I recently met a guy using black magic to harness soul energy of others to empower himself and his spell. Believe it or not.

    So i said a mentioned a few things, presented a few things and well…this dude using black magic unraveled his own spell, thinking it his own idea.

    Restoring the energy back to its owners.

    Thank you for clarification.

    Good good! Thank you

  2. When your property tax is added with your income tax. And said combination exceeds the State Caps on the combined deduction. Then why on Earth does it make any sense to own property so that I have the privilege of not being able to deduct the tax on my income? New Rules next depression.

    • It makes sense to own property, so’s you have a place to store that pitchfork which you and your neighbors should all be carrying to your State capitol to use as an oratorical prop, whilst you talk to your legislators…

      • whats smarter Ray.. is instead of marching.. that just gives everyone a good reason to call out the guard.. increase police actions etc.. scares the hell out of the good citizens..
        Remember Rodney king..the protestors looted and destroyed businesses.. this didn’t make any changes.. instead be SMART about it.. Like I told my niece.. she is a professor at an upper crust college.. she and I went rounds.. she was going to march.. I said what the hey.. do it smart.. if you have fifty thousand people all upset.. then buy a few books of stamps envelopes and paper…. make a simple request out on a sheet of paper.. have it copied at a print shop.. then hand them out a reem of paper per person.. then send everyone in Congress.. Not just your own representitives but everyones.. a letter a day.. split the group up into four groups.. and mail.. your out the mailings one week a month.. ..
        She said.. they won’t look at it.. they will just toss it out.. absolutely.. they will.. just like the contests .. they mass mail out.. chuck and toss..But.. for the same reasons why a congressman won’t read any of the bills the puppeteers want them to pass.. thats a lot of reading.. the health bill I gave up after six hundred pages.. it was a nightmare.. and would take a good team of lawyers a couple of years to even understand the dam thing..
        What will happen.. is seventeen thousand letters is about seven truckloads of paper.. it would take a good old midwestern farm boy a couple of hours to unload.. and a team of city boys all day to unload.. that is seven postal drivers seven city boys to unload and toss seven garbage men per congressman and have you ever seen the traffic in DC… heck they would call the congressman up from whatever activity he’s doing someplace else and have him fly back to dc.. that is per day.. per congressman.. you would employ thousands of new laborers.. and thats not counting the mass transit either.. no threatening gestures.. and bog down the DC turnpike.. the traffic that is at a normal stand still would be un moving.. that my friend is news.. and whether or not that congressman is getting millions or not from whoever wants them to do this or that.. they would move on that subject in lightning speed to end it..
        Yet no body gets it.. they either can’t visualize it or they want to be seen on the nightly news all painted up.. or maybe they just don’t have confidence enough in their cause..
        the same thing with farm prices.. oh this one says they aren’t going to buy because billie buttcrack wants to charge.. more for their milk or corn.. ok.. stop buying the products from that country.. no export no import.. you scratch my back I’ll scratch yours.. DJT gets that.. ;and has been attacked because that is what he basically has said.. you don’t pay taxes in the usa then you don’t sell in the usa.. since we are the ultimate consumption nation supporting the worlds economies.. we pretty much have them over a barrel as much as they have us.. if you have a company and you move outside the usa so as not to pay taxes.. well don’t let the dam door hit you in the keester on the way out..
        just my opinion.. but pitchforks won’t do anything but further their agenda

      • I was being flip, and speaking figuratively. The idea is, if’fn yer Property or State Income Tax are too high, the problem lies in your State capitol, not in D.C.

        Because Mr. Trump’s Administration capped the amount of State and Local Taxes which could be written off one’s Federal tax return, people who live in States whose Legislatures are crooked or irresponsible are feeling the bite, from having to pay for the personal irresponsibility they exercised when they voted for their Legislator &or Governor.

  3. WTH? Overview page shows 4 comments; only two exist…

    Personally, I’m overjoyed to no longer be subsidizing really bad decisions made by the MPC-owned Legislatures in Albany, Sacramento, Springfield, Trenton, and Hartford, and designed to purchase more longevity and power for the long-standing Liberal majorities.

  4. Hmm…
    I wonder George…



    An interesting thing.. I just went through a massive cut in our budget to compensate for increases in necessary expenses.
    Considering that.. Then the cut in federal programs that a third of the population is being forced to seek out. A reduction in annual wage increases among the blue collar laborer class.. Along with An increase in tax rebates given to the top five percent..

    All of this indicates that I wasn’t the only one having to make cuts and watch spendale funds.
    You can raise the prices and taxes to wherever you want..

    But if your a home owner and have to cut a few hundred off of your spend able budget.. Means your not spending those funds on unnecessary items. Expand that to lets say thirty million laborers well you get the picture..
    Could this just be an indicator to a population that has been forced to not spend.
    Reagan discovered this.. And he and Sr. Had tax rebates to stimulate the economy. It was also one of the reasons why the EIC tax rebates was born an increase to the food stamp programs along with heating assistance housing assistance along,daycare assistance along with how they deduct taxes. take less but charge the same you’ll spend five dollars if your kids need milk.
    They did all of that To stimulate the economy and give them a reason to seize SS funds to bail out banks that were failing at that time and.get people spending..
    Now after decades of forcing them to seek out these service programs take on more jobs while outsourcing jobs.. We now want to Force them to stop spending on the economy on goods and services. This leaves those industries with no other choice but cut back spending as well..
    Could that possibly be a factor.. In this drop.. And will it continue..
    A quick band aid would turn it temporarily around.. Cheese and peanut butter anyone. Or maybe a Tax rebate..
    Even with that the correction has to be made.
    We should have went through it when carter was trying to stabilize the inevitable..
    Oh well just a wobdering whether or not this could be a factor.


Comments are closed.