- New home sales is a great variable to watch for recessions.
- “When the YoY change in New Home Sales falls about 20%, usually a recession will follow.”
- Any Fed tightening cycles that cause recessions show up here first.
- There are exceptions to this rule – usually due to strong spending on defence or non-residential investment holding the economy up. The pandemic also distorted the series.
- Currently this indicator isn’t flashing red.
Recession Watching
