We’ve never had a soft landing before, but this is how I imagine one would look – mortgage rates drop just enough to have sales and pricing level out:
| Year | ||||
| 2014 | ||||
| 2015 | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 |
We could have done better (see 2016), but it could have been much worse too. In 2014, when pricing was substantially lower, we only had 173 sales – which goes to show you that pricing isn’t the only component.
It looks like an early surge is likely in 2020, after that….who knows?
https://www.bloomberg.com/opinion/articles/2019-12-10/as-the-fed-angles-for-a-soft-landing-expect-a-dovish-hold
Powell has repeatedly said that the central bank’s timely shift toward easier policy helped the economy absorb this year’s negative shocks. Increasingly, it looks like he is right. The yield curve un-inverted, lower interest rates boosted housing, the consumer held strong, and, if you fancy the Markit PMI indicator, there are even signs that the beleaguered manufacturing sector is stabilizing. By all appearances, central bankers seem to have managed the trick of guiding the economy into a soft landing. If conditions hold, the current episode will look very similar to the Fed-directed soft landing in 1995
The November employment report further supports the soft-landing hypothesis. Although the headline gain of 266,000 employees received a boost from 41,000 autoworkers returning from the strike at General Motors Co., this just mirrored a loss of autoworkers the previous month. The average job gain over the past three months is an undeniably healthy 205,000.
That job growth, combined with wage growth greater than 3% over the past year, will provide continued support for consumer spending. Lost in the excitement over Friday’s employment report was the University of Michigan’s preliminary release of its monthly gauge of consumer sentiment, which climbed to a seven-month high in December. Buying conditions for household durables and vehicles were both higher. Reports of the demise of the American consumer still look premature.
With the economy apparently on firmer footing, the Fed has the go-ahead to take a pause, following through with their October decision to hold rates steady absent a material change in the outlook. I don’t anticipate much if any change in the guidance.