I’ve dug into some more data to see what the car sales-housing connection might be able to tell us about future demand for credit and the results are striking. First is ex-refinancing monthly housing finance charted against car sales and, as you can see, there’s some kind of lead/lag correlation. The largest divergence over recent years was during 2004 housing shakeout:
On a longer term chart a good correlation still holds with a very big double top in housing finance being matched, until the last couple of months, by car sales.
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So, we can observe again, if the correlation holds, in the months ahead either car sales will diminish or mortgage finance rise.