What had the headline
software giddy, of course, was the year over year comps, which were in double
digits. Yet did the
talking heads bother to note the deep hook in last summer’s data?
No they
didn’t. Otherwise they might have seen that the two-year stack in
July came in at a hardly fulsome 3.7% annual rate and that nominal private housing spending is still 7%
below December 2007 and 43% below the early 2006 peak.
More importantly, they might have noticed
that this is no longer your grandfather’s housing market. The US housing
stock got way over-built during the Greenspan bubble and the incoming
generation of home-buyers has gotten buried in $1.2 trillion of
student debt.
So
notwithstanding the mini-boom in multi-family apartment construction, the $380 billion annual rate
of spending in July amounted to only 2.1% of GDP. That’s the same rock
bottom ratio registered in July 2013, and is clear evidence that the
housing needle has not really moved at all.
