Episode summary
Daybreak Weekend: US Housing, German Elections & President Xi's US Visit | Bloomberg Daybreak:...
Bloomberg Daybreak: US Edition
· · 40 min · Hosts: Nathan Hager
Summary
US new-home sales and builder demand were framed as the first key test of a housing market that remains frozen by affordability. An analyst said activity is still about 20% below normalized levels, with mortgage rates back above 7% and home prices up 50% to 80% in some markets. The analyst expects builders to keep leaning on price cuts and incentives, and said the market is likely to stay under pressure into the rest of 2026.
The show also previewed consumer earnings from General Mills, Darden Restaurants and Costco. The discussion centered on whether households are trading down, whether restaurants can offset softer traffic with stronger brands, and how same-day delivery and third-party apps are reshaping Costco’s business. The focus was less on a strong consumer and more on which companies can protect margins while shoppers stay selective.
In Europe, the program examined whether the Alternative for Germany can convert its rise in support into governing power after strong results in Saxony-Anhalt. A Bloomberg Germany bureau chief said the pressure on Friedrich Mertz has intensified, especially with two regional elections approaching, while a political analyst warned that a poor result in North Rhine-Westphalia next year could become a major threat to Mertz’s future.
The final segment previewed President Trump’s state visit with President Xi Jinping in Washington on Thursday. A Bloomberg television correspondent said the relationship still has a “trust deficit,” with the most realistic outcome being an extension of the current trade truce. The conversation highlighted Iran, tariffs, artificial intelligence and the possibility that Chinese EV maker BYD could become a flash point in talks.
Key takeaways
- An analyst said US new-home demand is still weak, with activity about 20% below normal and mortgage rates back above 7%.
- The analyst expects 2026 new-home sales to fall mid single digits and said builders will keep using incentives to defend volume.
- General Mills, Darden and Costco are being watched for signs of consumer trade-down, margin pressure and delivery-driven changes in shopping behavior.
- The Germany segment said the Alternative for Germany’s momentum is raising the political pressure on Friedrich Mertz ahead of regional elections.
- The Xi-Trump preview suggested the likeliest near-term outcome is a truce extension, not a broad breakthrough on Iran, AI or trade.
Notable quotes
“the existing market remains frozen. Activity is about 20% below what a normalized level is”
“for the new home market, we've got sales down mid single digits for all of 2026”
“The big question still with Costco when you look at kind of expectations is how are they competing with the likes of a Walmart”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, we look to some key housing data in the US. I'm Nathan Hager in Washington.
I'm Ta Adabay in London where we're asking if Germany is on the cusp of a political shift. I'm Doug Krnner looking ahead at the meeting between Donald Trump and Xiinping set for Thursday in Washington. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 1130 New York, Bloomberg 991 Washington DC, Bloomberg 929 Boston, DAB Digital Radio London, SiriusXM121, and around the world on Bloombergradio.com and the Bloomberg Business App.
Good day to you. I'm Nathan Hager. We begin today's program with some key housing data in the US.
The government's report on new home sales for August is due out this Thursday. Here to discuss is Drew Reading, US home building analyst for Bloomberg Intelligence. Great to speak with you ahead of the print, Drew.
Of course, this comes after we got that surprise jump in existing home sales uh just a couple days ago. Are we finally starting to see some green shoots in this pretty depressed housing market that we've seen over the last several months?
Yeah, so I think I think depressed is is the right way to frame it. Um, you know, there was a modest beat on the pending home sales side, but we're still bumping along the lowest levels um since the index was released. Um, you know, the existing market remains frozen.
Activity is about 20% below what a normalized level is. um you know and and it really comes back to affordability as we all know. It's the 50% to 80% rise in home prices depending on the market.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us housing
- home building data
- german elections
- xi us visit
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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