Quite reasonably, many people look to the home building industry as an important component of analyzing the business cycle. I agree it is a vitally important and cyclical industry with far-reaching tentacles that spread through the economy. It is also a historical fact that the industry has been a leading component of post-World War II business cycles within the United States, as well as in other countries’ business cycles. All other things being equal, I would bet that it is more likely than not to be an industry that leads within business cycles more often than not in the future.
You have been steadfast in your economic cycle outlook. Those of us that lived through "dot-com", GFC and COVID appreciate your conviction and guidance. Long and variable lags sure can be stressful...
You are my favorite economist. However, I was disappointed you did not talk about DHI, KBH, and Len earnings. They were terrible, and they are sacrificing margins to hit their quota . Yes, their stocks are up, but earnings are down. They are offering all kinds of discounts. These people are salesman so we should expect no less. Lennar’s average price they sold a new house for was way down. Imagine if Apple reduced the price of an iPad from 500 to 450. But, that’s what the home builders did, and they didn’t sink. They went the Walmart way, and went for volume over margin, and did some buybacks. Keep up the good work!
Hate the Illusion, love the Meme!
Incredible post! Thank you for the needed additional context. Amazing.
Loved this Kayfabe. Last week’s housing starts caught me off guard a bit. Great perspective and analogues.
You have been steadfast in your economic cycle outlook. Those of us that lived through "dot-com", GFC and COVID appreciate your conviction and guidance. Long and variable lags sure can be stressful...
You are my favorite economist. However, I was disappointed you did not talk about DHI, KBH, and Len earnings. They were terrible, and they are sacrificing margins to hit their quota . Yes, their stocks are up, but earnings are down. They are offering all kinds of discounts. These people are salesman so we should expect no less. Lennar’s average price they sold a new house for was way down. Imagine if Apple reduced the price of an iPad from 500 to 450. But, that’s what the home builders did, and they didn’t sink. They went the Walmart way, and went for volume over margin, and did some buybacks. Keep up the good work!