US Inflation and House Prices Trend Forecast

Economics / Inflation Jun 05, 2019 - 01:39 PM GMT

Official US CPI inflation remains marginally below the Fed's 2% target at 1.9%. Generally where house prices are concerned the higher the inflation rate the better as long as the economy is growing. Nothing much screams out from this chart other than at 2% inflation on balance is supportive of house prices.

Producer Prices Index

PPI, a leading indicator of economic activity shows that the US economies growth spurt to 3.2% may prove to be short lived, warning that a year from now the US economy will likely be a lot closer to 2% GDP than 3% GDP. In terms of house prices, then it confirms the current downtrend in momentum towards zero.

This is the fifth in a series of articles that concludes in a new multi-year trend forecast for US house prices that seeks to replicate the accuracy of my last US House Prices trend forecast.

12 Jan 2013 - U.S. Housing Real Estate Market House Prices Trend Forecast 2013 to 2016)

US House Prices Forecast Conclusion - As you read this, the embryonic nominal bull market of 2012 is morphing into a real terms bull market of 2013, with each subsequent year expected to result in an accelerating multi-year trend that will likely see average prices rise by over 30% by early 2016, which translates into a precise house prices forecast based on the most recent Case-Shiller House Price Index (CSXR) of 158.8 (Oct 2012 - released 26th Dec 2012) targeting a rise to 207 by early 2016 (+30.4%).

And here's how the US house prices trend forecast concluded early 2016, resulting in only a -2.5% deviation against the forecast so proving remarkably accurate, as had my preceding forecast during the bear market.

Which brings is to the present. Where despite all of the mainstream media noise and the usual perma doom mantra, the US housing bull market has continued to rage on upwards all the way to NEW ALL TIME HIGHS!

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

The whole of this analysis has first been made available to Patrons who support my work: https://www.patreon.com/posts/us-house-prices-26484438

Current State
Momentum Analysis
US ECONOMY - GDP
Unemployment
Inflation, Producer Prices Index
Yield Curve
US Debt
QE4EVER!
DEMOGRAPHICS
US Home Builders Index (XHB)
US Housing Market Real Terms BUY / SELL Indicator
US House Prices 2019 to 2021 Trend Forecast Conclusion
Peering into the Mists of Time

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Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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