US housing, + jobs and wages

I see the homebuilder cycle turning, in my twitter feed, I see it in the homebuilder constituents (share price recovery) and I fully accept that there’s a profound shortage of homes, especially given h/h formation since the pandemic.

And yet, mortgage rates of 6.56% (+ more persistent) is very hard to square.

If the +500k NFP (non-farm payrolls) is real, rates gotta stay high. It would mean that the economy is not only stable but accelerating. That would definately suggest that the level of interest rates required to maintain the economy “at potential” is higher than whatever we thought it was previously.

If it’s not real, and the trend of declining NFP’s is real, then I think you’d be sweaty about a big swing at high beta / cyclicals.

Shrugs. Good reasons to be bullish, good reasons to bearish.

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