It’s a yawner of a market today. The S&P 500 is trying to bounce back above its moving averages and set the stage for a new bull market. If this fails, it would confirm lower highs and would presumably lead to lower lows, which is the definition of a bear market.
I know that dosn’t tell you much, but if you are looking to buy you need a better reason than the macro chart.
There were two bits of economic news out today.
New Home Sales Data (February 2025): The U.S. Census Bureau and the Department of Housing and Urban Development released the latest new home sales figures this morning. The data showed new single-family home sales reached a seasonally adjusted annual rate of 676,000 units, slightly below the consensus forecast of around 680,000 but up 1.8% from January’s revised 664,000 (originally reported as 657,000).
The supply of new homes stood at 8.9 months, and prices saw a downward revision for January (-4.26%) with a year-over-year drop of -1.52% and a month-over-month decline of -3.02%. Home builders are cutting prices and slowing builds.
KBH Homes (KBH) is a major home builder with $6.5 billion in sales last year. The share price has dropped from $89 to $59 over the past six months. They reported earnings a few days ago and missed.
The CEO Jeffery Merzger wrote in a statement: “Consumers are working through affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing them to move slowly in their homebuying decisions. Demand at the start of this spring’s selling season was more muted than what we have seen historically, despite a healthy level of traffic in our communities.”
In places like Texas, it would appear that housing was overbuilt. The biggest problem is in multi-unit apartment buildings, which are seeing defaults soar to 2009 levels.
The North East is holding strong with limited inventory. I live within commuting distance to Washington D.C., in a top school district. There are zero houses for sale in my town and very few in the surrounding area. The average time on market is 21 days.
That said, in the COVID boom towns, you are seeing repeated price drops, relistings, and housing that has been sitting for over a year. If you bought a house for $300k and convinced yourself it was worth $600k and eventually sold it for $400k, they record that as an increase in sales price; however, it is a massive cut in perceived wealth.
If you are paying cash for a cabin in the sticks or a condo in Florida, there should be some real bargains by late summer.
Consumer Confidence Index (March 2025): Consumer confidence fell the most in twelve years. The Conference Board released its Consumer Confidence Index this morning and it showed a dip to 92.9, below the expected 94.0. This could indirectly tie into housing, as weaker consumer sentiment might signal caution among potential homebuyers, though it’s not a direct link to the housing report.
And finally Waymo said Tuesday it will begin offering robotaxi rides via the Waymo One app in Washington, D.C., in 2026. That said, DC still requires that a human sit behind the wheel so the company will have to have some rules changed.
Waymo, which is owned by Alphabet (GOOGL), is aggressively expanding its robotaxi coverage ahead of potential competitors like Amazon’s Zoox and Elon Musk’s Tesla. Waymo already operates a commercial service in Phoenix, LA, the Bay Area, and Austin.
Wall Street is sleeping on the tremendous growth of Robotaxis, which is why I’m putting the finishing touches on a free report that should be out in a week or two.
All the best,
Christian DeHaemer
Outsider Club
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