Negative signals for the US housing sector

Macro indicators for the construction sector, and the housing market in particular, have been poor recently. Homebuilders confidence has plummeted, housing sales and starts are stagnating at low levels. A sector so central to the economy appears to be frozen. President Trump has an idea for boosting the sector, and this would involve cutting Fed rates by 200-300bp in one fell swoop, in the hope of making the cost of mortgage borrowing bearable. His anti-Powell fury no doubt has something to do with this housing slump. It goes without saying that the Fed is not prepared to move that fast or that hard. Meanwhile, prices of houses (the main asset of households) are showing signs they may dip.