Case-ShillerYOY% and BTCUSD are Correlated = Danger for BTCUSDThis bodes ill for BTCUSD at a time when housing prices and rent are a national policy priority
USCSHPIYY trade ideas
Is the housing market under stress?This chart shows AMEX:XHB the Homebuilders ETF vs ECONOMICS:USCSHPIYY the Case Shiller House Price Index YoY...
What do you notice?
Well, one data set is lagged by the other.
Housebuilders are far more sensitive and closer to the macroeconomic realities and housing supply and demand than the general population on aggregate (because it's their business to be, obviously).
Currently, the Housebuilders ETF is down, whilst house prices remain slightly elevated, albeit with cracks appearing as interest rates have risen, leading to mortgage rates to also increase.
You can make some parallels with Dow Theory here...
'The Dow theory is a financial theory that says the market is in an upward trend if one of its averages (i.e. industrials or transportation) advances above a previous important high and is accompanied or followed by a similar advance in the other average.'
Material costs are through the roof, and with headline inflation at multi decade highs, it's likely demand in the economy will subside as well.
See, housebuilders only build when they predict the market will sustain an upward trajectory, and one could argue with XHB ticking lower, there is fear this upward trajectory has ended.
Today we saw durable goods orders decline 2.1%, pointing to a consumer struggling with making bigger purchases amidst this inflationary backdrop.
What might this spell for house prices further down the line as the Fed decreases its holdings of mortgage backed securities, de-liquifying this part of the market?
Well, it's likely we'll face repercussions in credit as spreads widen and the wealth effect dissipates.
As I've mentioned in a previous idea ( ), this is a more key factor as credit spreads are really the elements which show which way we're headed.
I think it's time to argue that housing is facing some serious downside potential.
Real Estate Is Rolling OverToday we are taking a look at the Case Shiller Home Index on a year-over-year chart as well as a price chart and using basic, long-term technicals to identify issues and opportunities. I believe we are heading into a recession over the next few years but we will have to see what crazy government program is created to fight that recession that maybe boosts housing back up. Don't forget in 2009 they were printing a ton of money and it didn't save the housing market. I believe home prices on a national level will fall between 25-30% by July 2025 and July 2026. This will depend on if we get UBI, a war, or major hikes in interest rates to fight inflation. Although, I don't believe the FED can hike rates too high because we can't afford the interest on the debt then due to the short-term rollovers.
Overall, I am bullish on cash flow real estate in growing areas with growing incomes that have freedom in mind. These areas are experiencing growth at a high rate but some of them are getting overheated. On a national level, I expect this all to play out over 3.5-5 years.
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