Real Estate Downturn 2022
The US Census Bureau reported this week, that new housing starts dropped 9.6% last month!
Building permits last month also fell slightly by 1.3% from the June rate.
Real Estate Downturn 2022
Also, the National Association of Homebuilders recently reported that home buyer confidence has fallen to its lowest level since May 2020.
In a statement released by The National Association of Homebuilders, their Chief Economist said that the real estate market has entered into a housing recession!
Yes, after nearly three years of spectacular home price appreciation, the housing bubble is now finally breaking. What we’ve experienced with the real estate market in the post-pandemic world has been nothing short of speculator. Prices went up more than 50% in just 3 short years.
Now it looks like a housing foreclosure surge is about to hit the US Housing Market.
Also, home foreclosure starts are up by over 150% year over year, as banks are working through the foreclosure backlog built during the pandemic. These foreclosures are going to hit housing markets like Riverside, California, Las Vegas and Phoenix, Arizona hardest.
One reason I believe these foreclosure are going to be worse than anticipated is because of all the BAD LOANS across the US Housing Market. Homebuyer down payments have been consistently declining over the last 50 years while debt to income ratios have been rising. In fact – Homebuyers are putting less money down today than they were at the peak of the 2006 Subprime Bubble.
During the pandemic the US Government stopped these defaults from turning into foreclosures by enacting the Foreclosure Moratorium, which restricted banks from foreclosing. But now the moratorium is gone, and there will be a wave of homes that hit the market via Short Sales, Auctions, and Pre-Foreclosures.
The loans most likely to end up in default are FHA, Investor, and 2nd Mortgages. The markets that have the highest concentration of these mortgages – and thereby the most foreclosure risk – include Riverside, Atlanta, Orlando,, and Phoenix.
The US Housing Market Crash is well underway. A combination of a recession, escalating mortgage rates, and Inflation is driving homebuyers out of the housing market.
Always keep in mind, that purchasing or selling a home is a major lifestyle decision, and as such, should not be rushed into. So, by all means, if you’re considering purchasing or selling real estate in today’s market, do your own homework and draw your own conclusions! But, also consult with your legal & financial advisors prior to making your moves.
My opinions here are just that, opinions! The fact that I’ve been in the residential real estate market for over three decades, does not mean that my opinions are going to be any more accurate then your mother-in-law’s opinion, though I sure hope they are!
Real Estate Downturn 2022
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