These indicators tell us the housing market is hitting the brakes

It's Friday — Phil Rosen here. Before we rush into the weekend, let's check in with the slowing pace of the housing market, and what that means for the rest of the year's outlook.

One last lap before the weekend!

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1. We've seen a recent smattering of data across housing and real estate, and all signs point to a gradual but clear weakening of the market.

First, we can look to shrinking profit margins on home sales.

The latest numbers from property data service ATTOM showed that for typical home sales in the US, gains dipped to a two-year low through the first three months of the year.

The drop in profits marked the third consecutive quarter of nationwide slumps, and it coincided with falling home prices in three-fourths of the country.

Since peaking in the second quarter of last year, median home prices have tumbled 7%, according to ATTOM.

As the Fed's aggressive policy pushed all kinds of borrowing costs higher, mortgage rates at one point last year hovered above 7%, and affordability worsened for many home buyers.

"It is possible that the upcoming peak buying season of 2023 could lead to increased profits, owing to favorable mortgage rates and other factors," ATTOM chief executive Rob Barber said.

"Over the next few months, we can expect to gain more clarity regarding whether the current market stagnation is a short-term aberration or a more significant trend."

Another sign pointing to a softer housing market is lumber. Prices for the key building commodity dropped another 4% yesterday toward multi-year lows.

Data for March shows pending home sales unexpectedly dropped 5.2% in the month (economists were forecasting an increase of 0.5%).

"The lack of housing inventory is a major constraint to rising sales," National Association of Realtors' chief economist Lawrence Yun said.

"Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally."

While housing may be slowing for the moment, researchers are still warning of a bubble that's set to pop in the next decade, fueled by jarring shifts in demographics on the horizon.

Millennials, who are now between their mid-20s and early 40s (that is, prime home-buying years), have helped push up prices, and the largest generation since the Baby Boomers is creating a wave of demand that surpasses supply of houses for sale.

But that's going to reverse in the decade ahead as Boomers age out of the housing market and post-Millennial generations shrink.

That opens the door to a potential housing glut and crash in home prices.

"A generational housing bubble is on the horizon," Indiana University Center for Real Estate Studies said. "Demand reversal will intensify by the mid-2030s, when the annual number of homes that seniors add back to the market is expected to be 40% higher than current levels."

What are you seeing in the housing market in your part of the country? Are things slowing down or is the market still hot? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

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3. Earnings on deck: ExxonMobil, Chevron, and Sony, all reporting.

4. These 12 investments have strong technical setups right now. And they are holding strong even as the broader market faces the risk of a "climactic bear scenario." Here's how to capitalize — and the three warning signs to stay wary of in the coming months.

5. Russia's economy is facing a record work shortage. Wartime losses in Ukraine and a population exodus has left the embattled country with the lowest level of worker availability since data first became available in 1998.

6. Top economist David Rosenberg said a recession is going to arrive by September. And with it will come a painful credit crunch — as well as a 20% crash in the S&P 500.

7. The US debt limit has seen 78 changes since 1960. To Bank of America's wealth management team, this time is likely no different. Get the full details.

8. Ivy Zelman called the last two big downturns in home prices. The market veteran said she anticipates that renters are about to get some very good news.

9. This chief investment officer oversees $399 billion. He explained why it's critical for investors to be globally diversified this year and to avoid a "home country bias." Plus, he shed light on how the banking crisis created new opportunities for returns.

10. Hasbro stock spiked Thursday after revenue from its Magic: The Gathering franchise soared last quarter. The classic card game is still firing up fans, based on record preorders on hand for the next release, the company said. In other words: What gamer fatigue?

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.