Editor's note: The excerpt below is from today's Morning Newsletter written by Hedgeye U.S. macro analyst Christian Drake.
Housing, like most things Macro, is more about better/worse than good/bad. From a rate of change perspective – how we measure/contextualize data – less good is bad, less bad is good, and the successful front-running of second derivative inflections remains the sangre vital of macro alpha generation.
As it relates to housing, while the macro environment remains a discrete risk, (very) easy volume compares, the lapping of weather/QM Implementation/FHA loan limit reductions, looser regulation, and a fledgling stabilization in 2nd derivative HPI trends all sit as modest, prospective tailwinds for 2015.
In other words, the downside asymmetry that existed at the beginning of the year has largely collapsed and, from a rate of change perspective, demand and price trends are showing a nascent inflection that looks likely to continue as comps ease progressively into 2H15.
We’ll be hosting a conference call on December 11th updating our outlook for housing in 2015. Institutional subscribers can ping email@example.com for call details/access.