Homebuilder stocks are trying to tell us something about the US housing market

On paper, the U.S. housing market is down in the dumps. Last week, mortgage purchase applications were down 35% on a year-over-year basis, as spiked mortgage rates continued to keep some buyers on the sideline, while the number of homes for sale in March 2023 was 20% below levels seen in March 2022 as “move-up” sellers refuse to swap their mortgage rates of around 2% to 3% for something in the 6% range. But a constrained national housing market doesn’t equal a crashing housing market. At least that’s the message from Wall Street, which has helped to push up the…