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A “Housing Recession” Is Here, And It Isn’t Going To Be Fun…

The housing bubble has burst, and now people’s greatest concerns about the market are being confirmed. This week, a series of headlines announced that a new “housing recession” has officially arrived, but that shouldn’t come as a surprise for any of us. The stage was set for a major downturn for quite a long time. Over the past couple of years, experts warned that artificially low interest rates were creating a massive bubble, and now that the Federal Reserve is trying to roll back its policy by aggressively hiking rates, the housing market is being absolutely crushed because even as sellers slash prices to readjust to the current demand, buyers continue to face affordability issues. In lots of ways, what we are witnessing right now is similar to the market reversal seen in 2008. If nothing is done, it won’t be too long before millions of Americans are once again underwater on their mortgages and this crisis starts to reverberate on financial markets.
Yesterday, some worrying numbers were released by the National Association of Home Builders. Its Fargo Housing Market Index, which measures the pulse of the single-family housing market, dropped for the eighth consecutive month to 49, marking the worst period for the housing market since the 2008 financial crisis. For home builders, soaring input costs and lower demand make the perfect recipe for disaster. According to the NAHB, the Federal Reserve is responsible for this downturn. “Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession,” NAHB chief economist Robert Dietz stressed.
Believe it or not, the average rate for a 30-year fixed rate mortgage has almost doubled over the past 12 months. In August 2021, rates stood at only 2.86%. That’s why buying a home anywhere in the United States has never been more unaffordable than it is right now, and conditions will continue to deteriorate as we head toward 2023. According to Jose Torres, a senior economist for Interactive Brokers the U.S. is facing a “perfect storm” for a housing crisis similar to that of 2008. “A perfect storm is brewing in the real estate market due to nearly decade-high construction levels and dwindling demand,” Torres said. He also noted that many Americans can expect to “see a lot like what we saw during the great financial crisis” in terms of falling house prices.
Millions of people that would like to buy a home are being forced to keep renting due to the sky-high prices. But rent prices are exploding, too. Last week, official agencies reported that the median monthly rent in the U.S. has risen above $2,000 a month for the very first time. A new survey found that nearly 60 percent of all renters saw a rent increase during the past year, while just 38% said they saw their income increase, a study from Freddie Mac reported. Consequently, about 1 in 5 who experienced a rent increase said they are now “extremely likely” to miss a payment. 
We have seen the housing market cratering before, and all indicators suggest that another disaster is on the horizon. Do you even remember the tremendous suffering that millions of people experienced during 2008 and 2009? Well, it seems that we are going to see it happen again. When the housing market crash starts to accelerate even further in the months ahead, countless people will have their lives turned upside down as a result. A lot of this mess could have been avoided if our leaders had made different decisions. But they didn’t, so now a “housing recession” has begun. And it’s safe to say this isn’t going to be fun at all.

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Written by Epic Economist

Comments

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  1. Nice video!! Very engaging.
    Rich people have assets, which are inflation proof. On the other hand, earned income is vulnerable to inflation. That's why the rich get richer in inflationary environments. An example, wealthy person may own several homes, rental properties(Commercial/Residential), businesses, productive land, equities, bonds, etc. The average W2 employee gets taxed the highest rate, they own almost no productive assets.

  2. In the worst case scenario, you cannot rely on unemployment or govt aid. Many people who just have one job and if they are laid off and things get really really bad , you'll starve within a matter of months.

  3. It's not chaos, it's the absolute necessity of deflating the out of control affordability crisis.

    I don't feel bad for corporations who have to see enormous losses on their balance sheets after destroying the affordability of single family homes by purchasing millions of homes.

    They want us to own nothing, well we are not fucking happy about it.

  4. I work in construction… i think is exagerating the work load is the same and we actualy make more even if we lower the mark up for men laybor. It's one of the best years over all. I work in the estimation front. I think we have more nuclear familly left those are the one that still can afford the construction cost…. Guess women still need men.

  5. Dude Idk where your getting your information but the houses prices haven't fallen, reason people can't afford is because companies and individual sellers are marking up or declining offers from couples that undercut the sell price

  6. This channel exaggerates. 2009 had nija mortgages where people got 0 or negative interest mortgages that slowly increased to double digits by year 10. All these mortgages dumped on the market. This represented much of the market. They were essentially a fraud mortgage that were marketed as triple a.

    When you compare this time you don't have these loans or the fraud selling to investors

    This won'tbe a 5 trillion dollar bank collapsing event.

  7. I would love to tell you The Truth from The Holy Bible about what is going on. However, I politely encourage you to read it for yourselves. By The Way, check out Truthunedited and Stephan Darby's sermons to get a deeper understanding for The Life. May Yah bless you and HALLELUYAH!

  8. house all paid off here years ago. no loans at all. 120k income between us.. bring on 10% interest ASAP. we can buy a house for our son in cash so he doesn't need a mortgage.

  9. Don’t fight the Fed my good friends…. Don’t fight the Fed.

    Charlotte, NC Housing Prices Crater 16% YOY As Price Fixing And Market Rigging Strategies Disintegrate

  10. Help I’m a 🇨🇦Canadian 🐖🐂farmer the police the RCMP are stalking harassing breaking into my property over and over without warrants please share watch they’re coming for the food the land you will be eating bugs by 2030 Police breaking in to my Canadian family farm again without any warrants please share https://youtu.be/e2MtiQPoukE

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