The signs of a weakening and crash-worthy economy are all around, such as a lack of confidence in the housing market. Demands for new homes have stalled this month, which has caused new homebuilder confidence to plummet.
Rising interest rates and the continuous rate of home price growth is hurting new homebuilders’ confidence in the housing market. Not only are homebuilders losing faith, but others are concerned about the affordability of homes now. According to CNBC, sentiment among homebuilders dropped 8 points in November to 60 in the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. That is the lowest reading since August 2016, but anything above 50 is still considered positive. The index stood at 69 in November of last year and hit a cyclical high of 74 last December.
“Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices,” said NAHB Chairman Randy Noel, a builder from LaPlace, Louisiana.
CNBC further reported that some of the United State’s largest publicly traded homebuilders, like Lennar and KB Homes, lowered their expectations for sales in 2019 in recent earnings releases. There is still a shortage of homes for sale, but newly built homes come at a price premium, and as interest rates rise, new home buyers are consequently hit hardest.
The average interest rate on a mortgage is now more than one full point higher than it was a year ago. And the Federal Reserve has tentatively scheduled four interest rate hikes for 2019, which has many wondering just how hard the central bank is willing to hit a deeply indebted nation.
https://www.shtfplan.com/headline-news/central-banks-collusion-global-debt-will-cause-the-ultimate-destruction-of-the-system_01222018
Of the housing market index’s three components, current sales conditions fell 7 points to 67, sales expectations in the next six months dropped 10 points to 65, and buyer traffic registered an 8-point drop to 45. Buyer traffic had broken out of negative territory earlier this year but now appears to be back in it solidly, reported CNBC.
“For the past several years, shortages of labor and lots along with rising regulatory costs have led to a slow recovery in single-family construction,” said the NAHB’s chief economist, Robert Dietz. “While home price growth accommodated increasing construction costs during this period, rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall.”
This is just one more sign that the nation’s economy is weakening. Consider preparing yourself as best as you can now for the inevitable economic crash. It may not come this year or next year, but it will happen at some point. The system we are living under is unsustainable and you don’t want to be crushed when it all comes crashing down.
https://www.shtfplan.com/headline-news/how-to-best-prepare-yourself-for-the-coming-financial-crisis_06282018
The person physically building the home — ie. homebuilder — lives on grape soda, in a car, with pieces missing.
The contractor will shanghai any hapless person, and leave him, anywhere. One local “employment opportunity”, while Kilauea burned.
Anyone who doesn’t see this as a speculative instrument, of no material worth, should get into the contractor’s car. He has candy and puppies.
I’m on an sparsely populated island in the middle of the Pacific.
Our biggest employer is tourism and the second biggest is government. We have virtually no industry. But they are building
houses like gangbusters. Median house price is around $320,000,
Most locals cannot afford those prices as most wages hover in the $14 – $20 per hour range. Somebody out there is doing well!
But it is not the general local population.
Rellik, the houses you describe are the typical “McMansions”. That’s the ONLY type of houses being built in my area. Most people in my area can’t afford something like that either. As far as I know, no one is building the lower-cost “cookie cutter” type houses anymore. If someone would build those instead they would sell. No one can buy a McMansion unless they make a six-figure salary and have the right kind of credit history. If someone wants anything smaller than a McMansion they have to go to the “hood”. A bunch of them for sale or rent in the “hood”. But the demographics do leave a lot to be desired. Better yet, move out of the urban area to a rural county.
Lennar Homes was responsible for shoddy building workmanship in many of the homes trashed in southern Florida during hurricane Andrew.
Aljamo, if those homes were built by Mexican crews it figures. I’ve seen them build houses faster than any other crews. I knew they had to be cutting corners somewhere.
The ideal situation is when you have enough money to build your own home according to your own needs and wants. First consider location. Is the property downwind of a nuclear site? Are you in a good State with low taxes and less regulations? Is the weather to your liking? Do you have people like yourself in the area? Can you build below ground? Do you have a stream or lake for water and fish? Is there wildlife and hunting?
Collect pictures and articles of homes you like and places you like. Someday you will need them when you build your own home.
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In southeastern Arizona prices are still high and buying appears to be slacking off. Some sellers are starting to pull their houses off the market creating an artificial shortage.The homes sellers are keeping on the market have lowered their price some. For what it’s worth,that is what is happening here
Some are apparently abandoned, except for the ‘floating’ property maintenance company.
Noone has explained to me, yet, why property taxes are not an issue for a landlord or owner or bank, without tenants.
Average Joes made $20 an hour in 1990 as that is only $41,600 a year…in Southern Indiana and Western Kentucky. Yet a hardworking guy could then build the basement and live out of it and slowly build his home. Or it was certainly possible to buy an older home for $80,000 on half to a full acre in the rural areas back then.
The median home price now in these parts is $137,000 yet the median wage for guys here is $42,900…28 years later. What does that tell you about inflated prices versus wages!