Moments ago we got the latest update out of Case-Shiller's composite home price index for the Top 20 US cities in May, or before rates soared and crushed all housing activity sending home affordability some 30-40% lower [4], which missed at the top line rising 1.05% sequentially, down from a 1.73% increase and missing expectations of a 1.40% increase (and with the annual price growth of 12.17% also missing expectations of a composite 1.40% increase).
But perhaps no other chart does more justice to the actual underlying factors (read institutional investing in distressed properties with the aim of converting them into rentals using FHFA-backed REO-to-Rent subsidies [5], as well as banks keeping REO and foreclosed inventory on their books) pushing prices higher, than the following chart indicating soaring home prices.
Guess which city this "data" represents:
[6]
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Give up yet?
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Here is the answer:
[7]
It appears that in the New Normal there is no better catalyst than a city bankruptcy to send home prices 20% higher...