Welcome back to The Week in Review.

I hope you had a good one.

There is an oppressive ‘heat dome’ over New York City—but from a work perspective that might have been a good thing. Without the option to be outside, I buckled down and finally published an analysis I had been tinkering with for weeks, about the relationship between school performance and home prices (here, ◎). The TLDR is that, if you want your kid to go to a top-notch public elementary school in New York City, you either have to live in a pretty expensive area, or move to the fringes of the the city’s outer boroughs.

There are a couple of exceptions though—you can see the full analysis here ◎.

Turning to the week ahead, it’s another fairly busy one for housing-related economic data.

• Case Shiller home prices are out on Tuesday (fresher Zillow data from a couple of weeks ago shows prices flatlining at the long term average growth rate of ~5% y/y). Last week I did a deep dive into long run moves in home prices using Zillow data, here ◎. Lance Lambert has a nice roundup of 2025 home price forecasts, here ◉.

• New home sales are released on Wednesday. Last month’s sales were far below expectations. Next week’s data could ratify the trend, or prove last month to be a one-off. But regardless, there is a stable and worrying trend brewing: supply is at 9 months (6 is considered normal). Prices are dipping. See my analysis here, ◉.

• ApartmentList rents come out on Friday. At last read, the national median rent had fallen by 0.8% over the past 12 months and is down 2.6% compared to its August 2022 peak. Some good analysis from ApartmentList here, ◎.

Subscribers can download the housing economic data calendar here ◉. Articles with a ◎ are free. Those with a ◉ have free previews but are only accessible in full for paying subscribers. Upgrade your subscription here:

News: Homebuilder sentiment dips
Views: Sentiment is moving sideways, tracking single family starts

Builder confidence in the market for newly built single-family homes was 43 in June, down two points from May, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the lowest reading since December 2023.

From the NAHB:

The June HMI survey also revealed that 29% of builders cut home prices to bolster sales in June, the highest share since January 2024 (31%) and well above the May rate of 25%. However, the average price reduction in June held steady at 6% for the 12th straight month. Meanwhile, the use of sales incentives ticked up to 61% in June from a reading of 59% in May.  This metric is at its highest share since January 2024 (62%).

Weak homebuilder sentiment is probably at least partly a function of firms sitting on a large pipeline of units under construction—will these clear at current prices when they come to market? Builders are already stepping up discounts.

News: Census residential construction data was released
Views: Multifamily constructions and completions remain very high

Housing starts dropped 5.5% to 1,277k (saar) in May, against consensus expectations for a 0.7% increase and the lowest level since June 2020. This was the slowest annualized pace in four years.

There are two notable macro trends. First, the single family market looks fairly normal, with permits, starts, and completions roughly in line with 2019 averages. Construction is a bit higher than 2019. Second, the multifamily construction cycle is wildly lopsided: permits and starts are far below 2019 levels, but construction and completions remain close to all-time highs, helping soften rent growth.

The pipeline of total (single and multifamily) units under construction is especially large in the South:

News: Existing home sales dipped
Views: Still little inventory, but it’s changing, even as sales cool

From Barclays:

Single-family sales declined in May while multifamily sales remained constant. Regionally, existing home sales declined in the South (-1.6% m/m), while the Northeast (0.0% m/m), Midwest (0.0% m/m) and the West (0.0% m/m) show showed no change in sales in May. Inventories increased to 3.7 months from 3.5 months on a non-seasonally adjusted basis, with existing homes available for sale rising to 1.28mn from 1.20mn, a continued rebound from the large drop in homes available for sale in December 2023. Months' supply of existing homes/existing homes for sale remained depleted compared with pre-pandemic levels, as well as historical trends, but recently are showing signs of growth.

This is the lagged impact of higher mortgage rates. In fact, the correlation between mortgage rates and sales has been unusually strong recently. With little relief on rates, it’s not surprising sales continue to languish.

Existing home sales are unusually tied to rates these days, here, ◉
Watch a video of my presentation about inflation, rates, and housing here ◎

Notion. For curious minds, the internet presents a conundrum. There is too much to read and watch and play. I’ve long realized the best I can hope for is to chip away at a fraction of the most timely and interesting stuff. My solution to dealing with the resulting FOMO is to clip things for reading/watching later. Of course, I rarely get around to them. But clipping for later allows me to get on with my day without remorse. For this—and so much more—Notion is the best tool I’ve seen. Notion, here ◎.

Hacks. It’s hard to find good evening TV to watch. Yes, I realize this is tough to reconcile with what I wrote above re: the deluge of content. But for pre-bedtime TV, I want something funny, smart, and not too intellectually taxing. There are so many great shows featuring dragons and spaceships, but they’re all a bit…intense. Hacks centers around an older comedian (Jean Smart) torturing/mentoring a young writer (Hannah Einbinder). It’s kind of about comedy, and surrogate mother/daughter relationships, but mostly (I think) about balancing ambition with the finitude of life. Hacks, season 3, on HBO, here ◉.

Have a great week,