Are Home Prices Just Too D@mn!#$ High?

We were surprised to see the sharp drop in the percentage of survey respondents with plans to buy any home within the next six months in August's consumer confidence survey released on Tuesday (chart).

After all, the 30-year mortgage rate declined from 7.79% at the end of October 2023 to 6.46% currently (chart). That's still relatively high, especially since the spread between this yield and the 10-year Treasury yield is 263bps, almost 100bps above its historical average. (We reckon traders might be considering shorting this spread.)