Saturday, April 25, 2015

Housing boom in 2015 says Goldman Sachs? Not so.

The chart on the right explains GS assumptions of a 2.8% GDP growth in 2015. The main  driver is a 6.8% growth in residential investment, in the right side of the chart. Currently Q1 is showing a 4.8%  decline, YoY, in existing sales, the Q3 2014 levels.  And new home sales dropped 11% in March. But that drop was from a previous high.





This is annual rate of housing permits, seasonally adjusted. Can GS get a 6.8% jump in these numbers?  The market has levelled off. Where are the new buyers going to come from?  Job growth has leveled off, and we have a low growth Q1. New buyers need at least one quarter to become a bit more confident, so that puts all the growth back into summer home season. 

I do not think so.

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