The Coming Housing Collapses Continues To Pickup Steam

The following report is by The Trends Journal:

In August, after sales of existing homes declined for a sixth consecutive month, the National Association of Realtors (NAR) predicted that “we may see two or three additional months of some decline—nothing meaningful,” Lawrence Yun, NAR’s chief economist, told Business Insider.

Now things have changed, Yun says.

Existing home sales were down 19.9 percent in August from a year earlier, he noted, leading him to predict an overall 15.2-percent slump in sales for this year compared to last.

Home sales will drop by 7.1 percent next year, compared to 2022, even if the market recovers during the second half of 2023, he warned.

That implies a slump lasting for at least three consecutive quarters, which would be triple the length of Yun’s earlier prediction.

What’s different now?

The big news for the housing market is the mortgage rates jumping this high this quickly.
Just last week, it was around 6 percent. Now it’s going to 7 percent. These are substantial changes.
Yun said in a 28 September BI interview.

The average rate was 7.06 percent on 3 October, BankRate.com reported.

As rates moved from 3 to 7 percent during the course of this year, the average mortgage payment rose by 50 percent, he said.

He sees rates staying near 7 percent for the next several months, but eight-percent mortgages could be ahead if inflation continues to “get out of hand,” Yun said.

If mortgage rates tick up one percentage point, that can make homes harder to afford as much as a 13-percent jump in home prices, according to Nadia Evangelou, NAR’s research director.

She foresees slowing home sales at least until April.

However, slowing sales will not mean lower prices everywhere, Yun emphasized.

Instead, prices will edge up 1.2 percent next year, primarily because fewer houses than normal will be on the market, he said.

“Month-to-month [price] change is showing decline,” he said, which “means that in about six months, half of America is probably going to see some price declines, but the other half will see some continuing price increases,” depending on location and market segment, he added.

TREND FORECAST: Higher interest rates and continuing high home prices will extend the trend of modest- and middle-income buyers being shut out of home ownership, a problem we have tracked through articles such as “Home Prices Up, Incomes Down” (16 Nov 2021) and “Middle-Income Buyers Too Poor to Buy Homes” (15 Feb 2022).
Burdened by student debt and rising living costs, even more Americans will spend a greater proportion of their lives, or perhaps all of their lives, renting instead of realizing their dream of home ownership, a trend we have documented extensively in articles such as “Home Prices Rise Record. Middle Class Dream Dying” (1 Mar 2022) and “Mortgage Rates Surpass 6 Percent for First Time in 14 Years” (20 Sep 2022).

AUTHOR COMMENTARY

The TJ’s forecast is the long way of saying, “you’ll own nothing and be happy,” for most people that is, but it is certainly true.

As I have been warning for sometime since The WP, this housing bubble greatly overshadows the 2008 market bubble pop. When it does, as with the rest of this façade of an economy, it will truly change everything.

Mortgage Rates Continue To Climb. Housing Market On The Verge Of Collapse

[1] Behold, the LORD maketh the earth empty, and maketh it waste, and turneth it upside down, and scattereth abroad the inhabitants thereof. [2] And it shall be, as with the people, so with the priest; as with the servant, so with his master; as with the maid, so with her mistress; as with the buyer, so with the seller; as with the lender, so with the borrower; as with the taker of usury, so with the giver of usury to him. [3] The land shall be utterly emptied, and utterly spoiled: for the LORD hath spoken this word.
Isaiah 24:1-3

[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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