Here’s a “Bold Call” on U.S. Housing Prices (Don’t Hang Your Hat on It)

This does not look like a bottom in median existing home prices

by Bob Stokes
Updated: August 15, 2023

Back in October 2022, none other than Realtor.com asked the question:

Is America in a housing bubble–and is it getting ready to burst?

That was 10 months ago and just like a widely anticipated recession, the feared bursting of the housing bubble has yet to materialize.

Indeed, another real estate sector firm — Zillow — has gone out on a limb with this prediction (Fortune, July 28):

In February, Zillow economists made a bold call that U.S. home prices had bottomed…

In the months that have followed, U.S. home prices as tracked by the Zillow Home Value Index have stopped falling, and between February and June rose 4.8%.

Yes, Zillow’s forecast has mainly worked out so far, however, let’s also keep in mind seasonal and other factors.

Here’s a perspective from our July Elliott Wave Financial Forecast, which used another measure to gauge the health of the U.S. housing market:

HomeSalesPrices

This chart showing the year-over-year change in the median existing home price doesn’t look much like a bottom. According to the National Association of Realtors, the median existing home sold for $396,100 in May 2023, a 3.1% decline from May 2022, “marking the largest year-over-year price reductions since December 2011.” Recent increases can be attributed to two factors: spring buying, which happens every year, and the run-up in equity prices, which makes people feel wealthier.

So, we’ll see what happens after the seasonal bias passes. And, just as importantly (or more so), we’ll have to keep an eye on the stock market.

History shows that the housing and stock markets tend to be correlated.

So, if the stock market tanks in a big way, we could have a replay of 2007-2012 on our hands.

Of course, that’s a big “if.”

One way to gauge the health of the stock market, and thus the housing market, is to keep an eye on the stock market’s unfolding Elliott wave pattern.

At this juncture, it is nothing short of attention grabbing.

See for yourself — as you follow the link below.

Here’s What the Wave Principle Provides You:

“… a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market’s general position and outlook.” [emphasis added]

That’s straight from the Wall Street classic book, Elliott Wave Principle: Key to Market Behavior.

When you see how our Elliott wave experts put current stock market action into context, it all makes sense. In other words, Elliott wave analysis helps to prepare you for what’s next.

Get that “perspective on the market’s general position and outlook” via a special offer:

You can read the August issue of our flagship publication right now for just $7 — an 81% savings.

Click below to learn more.