Housing Is Providing Another in A Line Of Troubling Signs Pointing To An Economic Downturn


PUBLISHED TUE, JUL 2, 2019 1:54 PM EDT | UPDATED TUE, JUL 2, 2019 4:59 PM EDT

Jeff Cox





·         Declining home sales are “consistent with the possibility of a late 2019 or early 2020 recession,” St. Louis Fed economist William Emmons said in a report.


·         The analysis overlays home sales over 12- and 36-month periods to look at trends that have held up during the previous three recessions.


·         Emmons said a recession, if it hits, would be “much less severe” than during the Great Recession that exploded in 2008.


A for sale sign stands before property for sale in Monterey Park, California.

Frederic J. Brown | AFP | Getty Images


A Federal Reserve economist says the current housing backdrop is similar to recent economic slumps, with several metrics “consistent with the possibility of a late 2019 or early 2020 recession.”

“Data on single-family home sales through May 2019 confirm that housing markets in all regions of the country are weakening,” the St. Louis Fed’s William R. Emmons said in a report posted on the central bank district’s site. “The severity of the housing downturn appears comparable across regions—in all cases, it’s much less severe than the experience leading to the Great Recession but similar to the periods before the 1990-91 and 2001 recessions.”

Specifically, Emmons looked at sales numbers for the 12 months ended May 2019 compared with the average over the past three years. He uses December 2019 as the “plausible month for peak growth” in the current case, and then looks at how far back from the peak was the first month in which sales fell below their three-year average in the previous three recessions.