Existing Home Sales just plunged to the lowest level since 2010, when the housing market was still reeling from the aftermath of the Great Financial Crisis. Existing homes account for more than three-quarters of the market, making this a critical signal that activity has ground to a halt.
This is yet another data point in a series of concerning housing-related reports that warn that the sector is nearing a breaking point. These other releases were detailed in a previous Market Insight available here.
Current housing market trends are not sustainable, and something will likely have to give. Whether that comes in the form of lower mortgage rates, falling prices, or both remains to be seen.
As a result, the housing market will be an important area to watch in the coming weeks and months. For confirmation that trouble has arrived, keep an eye on the InvesTech Housing [Bubble] Bellwether Barometer. If this indicator dives below support at its recent lows (red dashed line), it will warn that housing prices are on the brink of a collapse, and the ramifications will be far reaching!
