Housing and the Business Cycle in 2024

In the previous post about Friday’s employment report, I wrote:

I suspect that the Fed has more room to fudge than normal. Housing construction is typically a leading indicator. But, construction is still stuck at capacity because of remaining Covid dislocations. The oddly high very short term rates would normally affect construction loan activity and slow down housing starts. But, there is so much pent up demand for housing and capacity is still so constrained that builders still have a backlog of projects. The Fed can’t really slow down or speed up housing completions.

There is a big opportunity here. If capacity can rise for builders, the Fed should give them all the room to run that it can.

More on builders and the Fed below the paywall.

This has been a fun time for me to write. My unique insights into the 2008 debacle really seem to lead to meaningfully unique insights into the current situation. I’m glad that my small cadre of subscribers can gain something meaningful from this, and I hope it has helped you all feel more comfortable about your cyclical risk exposure.