MudHen

The housing index appears to be rolling over well short of the 350 level. The past periods when the index rolled over (although only 2-3) suggests a long period to regain the past level. The US economy is close to a recession, which if one occurs would tend to result in a longer recovery (certainly with stocks). Persistent inflation argues against a significant decline intermediate interest rates. Some of the current house price level came from a one off increase in house prices post COVID that had weak economic fundamentals and could erode further than a cyclical reversal. Finally, the fact that the index is a 3 month moving average would tend to dampen the index.

budget request of $26 billion will be slightly discounted

The current trend appears to be rolling over with lower growth in the 3 and 6 month moving averages. The 3 month moving average would have to consistently increase by 0.9% each month to reach 350 in the series. Anecdotal reports on house sales suggest a continuing softening, which will probably not reverse through the winter months. Past periods that showed adequate price growth were characterized by low rates and strong economic growth. Although the economy appears to be holding up strength is limited to the top 10% of the income distribution a feature that is unlikely to support growth in this index. Rate declines have a lagged effect: historically this lag is 6 to 12 months. Therefore, rate declines will probably not have a meaningful impact over the forecast period. 

Confirmed previous forecast

Confirmed previous forecast

Higher interest rates, selling baby boomers, pressures for more affordable housing, and a weak economy argue for a continued weak housing market. However, 350 is less than 6% above the current level and there is the potential for low rates to spur house prices temporarily for a short period. The condition of any month increases the probability alone in an otherwise negative long term outlook.

The attack would be only likely in the context of an ongoing war or could precipitate a war. Otherwise such an interaction would not be made public. Thus, the question could be considered as what are the chances of war but only with this one characteristic.