When market players say housing leads us into a recession, it traditionally means the
Federal Reserve raised rates too much, housing slowed down as a result and a job-loss recession isn’t too far off. But a funny thing happened this year for the U.S. economy: single-family permits kept rising as new home sales were showing year-over-year growth. How did this happen when mortgage rates rose from the lows earlier in the year?
It happened because big homebuilders made deals, cut prices, and paid down rates, all to grow market share. The more prominent homebuilders are flexing their financial muscle over smaller builders and peeling off buyers to help sell homes. This has kept construction workers employed and they have the money to spend on goods and services.
One of the early indicators of a job-loss recession has failed to materialize, as construction employment has…
