The housing market bubble that fueled the Great Recession a decade ago is looming once again and has been for some time. But it’s all about to shift and things are going to be pretty grim for buyers.
The housing shortage that fueled competition and resulted in sky-high price gains throughout 2017 and the first half of 2018 is on the horizon yet again, and the supply of available homes could hit a new low. The number of for-sale listings was up 2.8% annually in June, but that was down from May’s 2.9% gain. Inventory gains began to slow this year from 6.4% growth in January to 5.8% in February, according to a report by CNBC.
Now is not the time to be buying a new home. While the market is inflated and prices are high, buyers are going to be on the hook for a home that’s worth far less than what they owe on it making a repeat of the 2008 housing bubble burst a reality once again. Supply is now expected to flatten over the next three months and could hit its first decline in October of this year, according to Realtor.com. And that will push prices even higher.
Fewer owners, for several reasons, have chosen to not list their homes. “It’s likely a combination of rate-lock, recently decreased consumer confidence and older generations choosing to age in place,” added Hale. But it could also be that even though a profit can be made by selling a house, finding a house to live in is also going to cost much more.
Home price gains had been shrinking, but the gains jumped up again in June for the first time in 14 months, according to CoreLogic. “Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May,” said Frank Nothaft, chief economist at CoreLogic. “This has been a shot-in-the-arm for home sales. Sales gained momentum in May and annual home-price growth accelerated for the first time since March 2018.”
Lower interest rates are attractive to buyers, however, when demand increases and supply does not, prices go up again and the bidding wars start to take place. This could realistically become a big problem much as we all experienced a decade ago. Oftentimes, the housing market is a good indicator of where the economy is headed both nationally and globally. Take the time to save up a little and pay down your debts if you can. Protect yourself by preparing for the next recession to the best of your ability.
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unrelated to topc.
Mac, i am having difficulty accessing your daily updates . How may i subscribe to your daily articles.
i have been comminting here for 9 years.
I’ve already got 50% interest in the BOL, where I’m going next month. Aug. can’t get here soon enough. Had new brakes and tires installed on the Dodge last week. I took it on a 400-mile round trip last Sunday and it ran like a top. It’s finally road-ready but I had to spend a fortune to get it that way. So for $10,000 total I’ve got a good truck for my own use.
I like hearing about you goin to your bol. It’s sounds like a lot of fun. Have a good trip.
I have the advantage of having two aunts that were very successful in the real estate business. What I did was buy less than desirable properties and improved them. I did not “Flip” houses, although I know people that do that sort of thing.
My angle was to buy acreage outside the city, taking care to be sure its location is fairly safe, from natural disasters , then make it comfortable, and relatively self sufficient. and work your way up.
I started with a single wide mobile home, which was a screw up, I never repeated.
Today I’m surrounded by homes worth millions. I’m on acreage with a clear ocean view, in Hawaii. I’m debt free.
Based on my Federal taxes, I’m way below the median income for my county.
It is not what you buy, but how you buy, where it is located, and how fast you can pay it off. Debt kills you.
relik, I did pretty much the same thing. Bought undeveloped land and built my own cabin (very cool too). I paid cash for ALL of it and now people are clamouring to buy land in the area (rarely ever for sale). The problem is my taxes keep going up and up! I am on a private owned road (no easements) with a gate 1/2 mile away. The area is surrounded by BLM land which cannot be bought. Except for a couple of neighbors it’s like my own private Idaho (on the ground like a wild potato). 😛
Moonspir its time to in my opinion to shelter in place as we are going into a GSM and we have major crop losses across the world not being reported and this is going to very difficult for most people to deal with but you wont hear about this on the socalled media but we will all see it in our grocery stores by the end of the year
This is the last full year to buy high cap mags untouched by any Democrat victories next year. Also buy MREs before the massive crop failures hit the news and the prices go astronomical.