In May, sales of previously-owned homes slumped, the second month in a row of declining sales. The National Association of Realtors, which tracks those sales, pointed to the same culprit it’s blamed for the past few years: not enough supply of homes to buy.
Shortly after the Realtors released their data, Regions Chief Economist Richard Moody wrote this in a research note: “Given that we see little reason to expect meaningful relief on the inventory front over coming quarters, we think it reasonable to conclude that we have passed the cyclical peak for existing home sales.”
Ten years after the financial crisis, the notion of a housing “peak” – which would naturally be followed by a downturn – seems downright spooky. The trauma of the last correction is still with us: more than 1.1 million Americans are still underwater, according to Black Knight, many foreclosures are still wending their way through the system, and ultra-tight lending standards put in place when the pendulum swung hard after the correction continue to lock many Americans out of the market.
But under normal circumstances, a correction in housing, like in any market, is normal, foreseeable – and possibly, though not certainly – upon us.