The U.S. housing market appears to be straining under the weight of its own pandemic-driven success. Recent data shows the sector is returning from the stratosphere and coming back to pre-COVID levels, as evidenced by a slew of data released this week.

While for much of the pandemic a rush to suburbia made the home and real estate stars of the recovery, the resulting plunge in inventory and dearth of building supplies have launched home prices beyond the grasp of many potential buyers, particularly at the lower end of the market.

"The housing market isn't caving just yet," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "Have we reached a peak? That’s a possibility, but worst case scenario, I see a leveling off."

The best news of the week for investors was delivered on Thursday by the National Association of Realtors (NAR), which reported that sales of previously owned homes (USEHS=ECI) rose 1.4% to 5.86 million units in June at a seasonally adjusted annualized rate, although the rebound was weaker than expected.

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Now, in fairness, a totally conflicting article ...

The Housing Market Is on Fire. The Fed Is Stoking the Flames.

Driving with one foot on the brake and the other pressing the gas pedal to the floor. That describes the housing market, with the Federal Reserve pumping fuel into the system while supply and affordability constraints slow things down. At the very least, this is costly; at worst, it risks serious overheating and a breakdown.

I think most economic commentators are exactly like psychics. They just throw shit out there and when it happens to hit they can make all sorts of claims about their abilities. There's no actual model that anyone tests or validates. They're not even like a weather forecast, where they're looking at probabilities - it's just straight bullshit.

Fair nuff ...
I don't think that's far off the mark ...

Hmmm ...
Pending home sales drop in June — more evidence of a housing turnaround

There’s a big shift happening in the housing market

Breakneck. That’s the best way to describe the pace of the 2021 housing market. The bidding wars got so intense this year that home price growth set an all-time record.

But the tide is turning.

The rush of buyers into the housing market during the pandemic absolutely crushed housing inventory—the number of homes on the market—with that figure falling for 12 consecutive months. By April, housing inventory was down a staggering 53% from a year earlier. However, the trajectory has flipped: For two straight months the number of homes for sale has gone up. Homes listing on realtor.com rose 3% in May, then again by 9% in June. That’s not all: We learned last week that new home sales are falling—their pace in June was the slowest since the onset of the pandemic. Every indication is that the market is shifting a bit in buyers’ favor.

Why the sudden cooling? Home shoppers are finally showing some reluctance to pay top dollar.