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Economic cycles are like serial killers on a Netflix show: they leave clues to get caught. Interpreting these clues gives you the ability to see when the economy is in recovery and when things are about to go into recession. My job as a data analyst is to provide the map you need to follow these clues, specifically as they relate to housing.
Each economic sector behaves differently in a recession; typically, the industry with the most leverage on growth gets hit the hardest. This was the case for housing during the lead-up to the bubble years as housing data went criminally insane in the years 2002-2005.
As we close in on Thanksgiving, we can be grateful for the recent excellent jobs report, which shows that the housing crash fanatics have failed once again in 2021. But during any economic expansion we can expect to see the occasional red flags warning us of the next economic recession. Some of these flags will just be noise in the system that can be ignored, while others may indicate actual cracks in our foundation that need to be heeded. The trick is being able to distinguish between the two.
Regarding the U.S. housing market, no single metric can herald an oncoming slowdown; it will require several factors signaling in concert for the warning to be meaningful. I’ve outlined these factors below.
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The post When will we see the next housing recession? appeared first on HousingWire.
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