I feel you Scott. It doesn’t seem to make sense. I’d decouple the stock market from the housing market though. Stocks may be more affected by the Fed printing money and the government’s willingness to step in.
I’d argue that housing is maintaining prices due to the unusual, but consistent pressure on supply and demand. People who planned to list, are holding off. We know the market supply is low. You have to own a house to sell a house. But people who are still employed and planned to buy still want to get out of their renting situation. You don’t have to own a house to buy one. So the demand is still higher than the supply keeping prices from dropping.
The housing market will drop when a bunch of people want to sell (and downsize or switch to renting because they can’t afford their mortgage) and/or fewer people want to buy because they lost their jobs, or don’t feel owning is as good of a deal as renting.
I don’t have the data to support this—but I’d hypothesize that a larger number of folks who lost their jobs we’re renting, not owning. So there hasn’t been a glut of houses for sale. (See Michael A’s post above.) When homeowners lose their jobs and default on their mortgages, supply will go up and prices may decline. I don’t believe we’ve seen that... yet.
