Second-hand home sales, which represent approximately 90% of home sales in the United States, fell in June for the third consecutive month, hurt by the high prices of these homes that last June reached record levels. REALTOR (National Association of Real Estate Agents) agency that produces the data, reported yesterday that second-hand home sales fell 0.6% per month to 5.38 million units (annualized and seasonally adjusted) compared to – 0.7% registered in May to a rate of 5.41 million units (revised down from the 5.43 million units previously reported). In April the drop was 2.7% per month. In these three months, sales of used homes have fallen by 3.9% accumulated.
In a year-on-year rate, second-hand home sales fell 2.4% compared to -3.7% in May and -2.0% in April. The same has been happening with pending home sales, which have had two months of monthly drops in sales and five consecutive months of drop in the interannual rate. Only new home sales have a positive year-on-year rate.
By area, sales increased in the Northeast and Midwest, but fell in the West and South. Inventory increased 0.5% year-on-year in June. That was the first year-on-year increase since June 2015. Based on June’s sales pace, it would take 4.3 months to deplete current inventory, up from 4.1 months in May. In April it was at 4 months and last January at 3.4 months. Finally, the average house price increased by 3.7% monthly (3.8% year-on-year) to $ 314,900, a new all-time high. For its part, the median price increased by 4.5% monthly (5.2% year-on-year) to a new historical maximum of $ 276,900.
The real estate sector is being affected by the “re-inflation” of house prices. And this is logical since wages have not increased in the same proportion.
On the other hand, on Monday China rejected Donald Trump’s accusations last Friday of manipulating its currency and said it did not fear his threats to impose tariffs on its exports. “China has no desire to support its exports with competitive devaluations,” said a spokesman for the Chinese Foreign Ministry. He referred to the well-known motto “The exchange rate is fixed by supply and demand in the market. Sometimes it goes down and sometimes it goes up, it fluctuates in both directions ». Despite this, the Chinese yuan has been registering, at the moment, only falls that place it at levels not seen since 2010 when it is trading above 6.80 CNY / USD. Against the EUR, the Chinese currency has also been weakening and is trading at today’s opening at 7.97 CNY / EUR, almost the lowest since 2014.
Comments on the USD by President Trump fade and relax the appreciation of the EUR in recent days. However, these words are an important indicator of the limits for the appreciation of the USD. These statements by Trump not only speak of self-interested manipulation by the EMU (QE) and China, but also lead to an accusation of the Federal Reserve Fed for its monetary policy (the current interest rate hike plan). Both factors have been the ones that have sustained this mini-race of appreciation of the USD since April.
Considering Trump’s personality, it is difficult for him to allow himself to “win” a war that he has started and in which, naively or selflessly, he “sold” it was easy to achieve victory. Remember which side the trade deficit is on. The exchange rate is one more weapon. Do you think you will not use it? Do you still expect a trade war to be compatible with a rising dollar?
THE AMERICAN COMMERCIAL HEGEMOMY IS INCOMPATIBLE WITH THE DOLLAR HEGEMONY.- It is the famous “Triffin’s dilemma.” Popular capitalists are money busters. They love inflation and currency depreciation, which implies accepting a scenario of high interest rates, something lethal when indebtedness has reached its limit in relation to ordinary income, that is, when Production does not give to honor more debt . If your currency is hegemonic, you have to relocate your Production. Maintaining the centralization of Income management is simple when, in addition, you have achieved that, outside your borders, the law of the jungle reigns. To become President of the United States, Trump has relied on the resentment of the losers of the non-commercial hegemony inherent to the dollar hegemony, which is what makes the United States an empire. He himself is resentful. Like all brickmakers, the doors of the capitalist Olympus are closed. In our humble opinion, he’s doomed to be tacky. How many real estate developers end up sitting on the Boards of Directors of authentic financial capitalism? None! Currently, the weight difference between the Dollar Hegemony and the lust for Commercial Hegemony is gigantic in favor of the Dollar. We all know what is going to happen and what is happening, even if it is not made official. The “America firstist” Trump smells bad, he is doing too much damage to the Dollar Hegemony, the popular-capitalist collapse is upon him and he will have to reinvent himself as his opposite, which he will do without shame. The situation is being held with chopsticks out of sheer voluntarism. The inflection of the Structural Transition to the Zero Era has never been so imminent. If you have real estate, for God’s sake, sell them now, but now, now, now. Are in extreme liquidity. They have the best liquidity available: the euro. Thanks for reading us.
PS: The Dollar Hegemony does not mean that always and in every situation the EUR / USD has to be on the ground. Rather, it would now touch a EUR / USD at 1.6000 or beyond. It is what the popular American capitalists long for. They forget the ‘small’ detail that, for this to be the case, it is necessary to give the Re-puncture / Recession in the US in advance to the periphery. If they do, they will retain the Dollar Hegemony. If not, we would be witnessing the end of the North American empire because, today, everyone can produce practically anything.