Housing market is officially in a recession, economist says

[mystery-ak]

August 15, 2022 10:13am EDT
Homebuilders see 'housing recession' as sentiment plunges to fresh 2-year low
Rising interest rates and abnormally high inflation triggered housing recession, NAHB says

By Megan Henney FOXBusiness

Confidence among builders in the U.S. housing market plunged more than expected in August to the lowest level since the beginning of the COVID-19 pandemic as painfully high inflation and rising borrowing costs forced potential buyers to pull back.

The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, fell for the eighth consecutive month to 49, marking the worst stretch for the housing market since the 2008 financial crisis.

Any reading above 50 is considered positive; the gauge has not entered negative territory since a brief – but steep – drop in May 2020.

The index has fallen considerably from just one year ago, when it stood at 80. It peaked at a 35-year high of 90 in November 2020, buoyed by record-low interest rates at the same time that American homebuyers – flush with cash and eager for more space during the pandemic – started flocking to the suburbs.

more
https://www.foxbusiness.com/economy/us-enters-housing-recession-homebuilder-sentiment-plunges-fresh-2-year-low-nahb-says

[catfish1957]

I know we have mentioned this a 100 times in this thread section thus far, but this news and the 5 related previoulsy are a precursor to a likely major collapse of real estate prices.

Be forwarned.

[DCPatriot]

I know we have mentioned this a 100 times in this thread section thus far, but this news and the 5 related previoulsy are a precursor to a likely major collapse of real estate prices.

Be forwarned.

It's affecting me right now, because I do evaluations for properties where the owners are applying for the waiver/removal of the Private Mortgage Insurance (PMI) on their current loans.

Lenders are denying them by mandating a 75% Loan-to-Value (LTV) instead of the typical 80%.

[libertybele]

I know we have mentioned this a 100 times in this thread section thus far, but this news and the 5 related previoulsy are a precursor to a likely major collapse of real estate prices.

Be forwarned.

I pity those that just moved down to this area of FL as housing prices have skyrocketed and I think many are going to soon find themselves upside down on their mortgages.  Many rushed to move here and bought at the very peak of the market without doing their homework. Some bought homes, sight unseen.

[mystery-ak]

Housing starts plunge 9.6%, raising recession fears
by Zachary Halaschak, Economics Reporter |
 | August 16, 2022 10:13 AM

The number of housing starts tumbled in July, an indication that the housing market is taking a hit and may be falling into a recession.

Housing starts measure the annualized change in the number of new residential buildings that began construction. Last month, they declined by a hefty 9.6% to a 1.45 million annualized rate after posting slight gains in June, according to a Tuesday report from the Commerce Department.

Additionally, permits to build, which are seen as a proxy for future construction, decreased by 1.3% in July, further adding strain to the housing market.

Tuesday's report is a sign that the Federal Reserve's campaign to slow spending across the economy by hiking interest rates is taking a major toll on the housing market.

“Net, net, housing permits have been shrinking every month since the first Fed rate hike in March this year as home builders know what’s-what and which way the winds are blowing,” said Chris Rupkey, the chief economist at FWDBONDS.

“Recession has come to the residential construction markets right on schedule as interest-rate sensitive housing is the first sector to turn down when soaring mortgage rates make it more costly for home buyers,” he added.

The news comes a day after a report indicated that homebuilder confidence fell for an eighth straight month.

The housing market index released Monday by the National Association of Homebuilders and Wells Fargo found that builders' confidence in the market for new single-family homes sunk 6 percentage points this month to fall into negative territory for the first time since a brief period at the start of the pandemic.

more
https://www.washingtonexaminer.com/policy/economy/housing-starts-worse-recession