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One of the driving forces behind inflation has been the cost of housing and rents, along with the wealth effect that comes with it, and the instability that potentially could cause if the bubble breaks.
Redfin, the large real estate brokerage company, has asked about 8% of its employees to leave today. The site a 17% below expectations demand in May. They also said they don’t have enough work for agents and support staff.
Finally the anticipate that they could be facing years not months of fewer home sales.
Not a good omen for home prices going forward.
Looking at lumber futures (a proxy for the housing market), the price is trading to the lowest level since September 2021 today, and in the process is moving further away from its 200 week moving average. Last week, the price moved and closed below that moving average for the 1st time since August 2021.
The move lower is sharp contrast to the high reached in May 2021 up near 1733.5. The current price is trading at 527.1. That’s a decline of near 70%.
