It may be time to start preparing for the upcoming housing market recession. All the signs that the housing market will continue to tank are rearing their ugly heads. It’s only a matter of time now.
The obvious factors weighing on the housing market are not particularly new. There has been a lack of affordable housing supply and the rise in mortgage rates to seven-year highs which are both continuing to put major pressure on the market. And according to a report by Yahoo Finance, in recent months, the shares of homebuilder stocks have gotten hammered. Existing and new home sales have declined sharply while the pace of home price appreciation has now declined for six straight months.
The latest data on homebuilder sentiment isn’t at all positive either. It shows a sharp downturn in confidence during November with the NAHB’s housing market index falling by the most in 8.5 years. The recent earnings from one of the country’s most prominent homebuilders is not going to boost the sentiment in the space either. The United States will face a housing market recession, if not an all-out crash.
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. –SHTFPlan
On Tuesday, Toll Brothers (TOL) called out the weakness in California’s housing market, the company’s highest revenue state. “California has seen the biggest decline,” Douglas Yearley, Jr., chairman, and chief executive officer at Toll Brothers, said in the company’s quarterly earnings release. “Significant price appreciation over the past few years, fewer foreign buyers in certain communities, and the impact of rising interest rates all contributed to this slowdown.” So far this year, shares of Toll Brothers are down over 30%.
Yearly also added, “In our fourth quarter, despite a healthy economy, we saw a moderation in demand. Fourth quarter contracts declined 15% in dollars and 13% in units compared to a difficult comp from one year ago. Fourth quarter demand slowed to a per community pace more consistent with FY 2016’s fourth quarter, which was still strong,” he said. “In November, we saw the market soften further, which we attribute to the cumulative impact of rising interest rates and the effect on buyer sentiment of well-publicized reports of a housing slowdown. We saw similar consumer behavior beginning in late 2013 when a rapid rise in interest rates temporarily tempered buyer demand before the market regained momentum.” According to Bloomberg, this was the first decline in orders for the company since 2014.
The best way to prepare for a housing market crash is to be aware that one is coming. Next, you’ll want to take steps to reduce or eliminate debts and save at least three months (a whole year is better) worth of necessary money in a savings account. Plan for grocery bills and emergencies too.
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I would LOVE to see Jones turn around and face punch that pajama-boy, pencil-neck [email protected] Accosta right in front of Trump.
It’d be like the old days when Trump showed up at WWF to throw a few punches
Housing is always in a boom or a bust.
I doubt it’s ever been stable, at least not in my lifetime.
Uhhhhh, how do you PREPARE for a housing market recession? Sell your house asap? Maybe a good time to buy a second home when prices are down? WTF?
Best way to prepare is to make financial preparations to put yourself in a buying position when it happens. Lots of bargains become available and sellers are frequently desperate to sell (especially fixer uppers if you’re handy at it).
Time to invest in rental properties and such, take advantage of it and establish a second and passive income for yourself when you would otherwise be unable to pull it off.
There’s more to preparing than just surviving in catastrophic situations, your overall life needs it too.
if I just bought my first home, been paying mortgage for a year now, im young, is there any advice you can share for me?
all input welcome from the wiser, more experienced, people.
If you can, pay a few dollars extra every month on the mortgage. That goes directly 100% toward principle. You’ll save a LOT in the long run, as interest on a 30 year note ends up costing far more than the house loan itself.
The idea is to get as debt-free as possible. Good luck
Grunting McPenis, how affordable is the mortgage on your double wide trailer?
Everyone I know that has rentals says it’s a giant pain in the arse.
Depends on how you go about it.
Are any of them, the ones you know, also griping about the extra income and net worth they gain from them?
Rental property is productive real estate. If you can get yourself in the position for it, productive real estate is probably the best investment available to the common man who doesn’t have the money or knowledge necessary for, say, a farm or office building investment.
Always having to fix stuff, rehabing, chasing rent, etc. A lot of rent is spent on taking care of things, taxes, etc. They sure aint getting rich from it.
I have and they are.Good renters are extinct
ummmm, ok, i’ll take this one. year 2000 was the final year of “Normal” home prices. that’s when interest rates became “abnormal”. we aint had a raise in pay(collectively) in the U.S. since then, thanks to inflation. look back to 2004, and it was obvious to all but the terminally nieve that homes were priced at triple what they would be worth with “Normal” interest rates. lucky for ME, my wife was cheating on me for YEARS, and i found out and divorced her in 2005. so the home i had owned for 13 years was now mine, and almost paid off. so in 2006, after sweating bullets that the housing market would crash any minute, i finally got it sold for TRIPLE what i had paid for it. i go rent a house for 3 years, and prices are almost half of bubble price, so i buy another one in 09. i knew the value would fall by a thousand a month for YEARS, but i was no longer getting any money for renting MY money to the bank(i WAS making enough every month to pay my rent, with several thousand left for spending money)…..and they DID fall by that much for around 3 to 4 years….then they jumped right back to what i had paid, and a lil more…..so 4 years ago, i sold again, but too soon…..waiting for prices to get to half and i will by back….or i buy a lot with a mobile home if sumthin’ crazy happens where prices don’t go back to “normal”…the biggest mistake people make is to take money out and spend it…..don’t DO that, and make sure you got at least 6 months salary saved up…..with anything left over, buy preppin’ STUFF….you’ll need it someday.
depression…..a housing DEPRESSION is coming…….there, i fixed it for yuh, mac. how soon they forget. we make LESS MONEY than we did in year 2000…..yet we pay double, and even triple for our houses in amurca…..good luck with that!
There’s 5 acres for $28K and 3 bedroom 1.5 baths homes here for 90K near where I live in Western KY. Carpe diem.
There is a perfectly fine 10 acre hobby farm plot in Union County KY which has like minded people so perfectly suited for rural preppers…and it still has some woods on it. It’s asking price is $70 which think is a steal if it’s fertile soil.
Why don’t y’all visit had get away from crazy Democrats?
Dadburn flatlanders. 70 bux? That is cheap lol. I would go insane without mountains… I can get farmable land here for 600 an acre. And have mountains nearby.
You guys should buy all you can. Farm & hunting land is going for 6k to 10k an acre here. And it’s all the farmers faults. They’ve bid up the land to get bigger to pay for their bigger loans for their bigger equipment & in & on.!! Vicious circle. The jerks could’ve stayed small & made the same amount of money with a lot less stress.
I’m not a farmer, why would I buy it? So I can be one and open the money pit from hell buying equipment and the plethora of shit that goes with farming? Like I need more taxes to pay for the breeders kids? I don’t see the value of it going up anytime soon, it would just be a waste of time and money.
Warchild is watching the N.H. region for some deal,am looking for more acreage(30 min)so can small scale garden/if want animals/better gun range/ect.,am on 10 acres now.I can at moment do this for 150 or so,willing to hit it when 20-30% lower,and as a carpenter/handyman can fix it all excepting too damn old for roofing,which in my opinion over 30 is TOO damn old!
well gaaawdam, warchild, how the hell you been? good to see you back on here! don’t forget eppe, he’s the one that got a bunch of us together….
Here we go again ?
The rich get richer and the poor get drunk.
and save at least three months (a whole year is better) worth of necessary money in a savings account, oh, puh–leeeze!!!
In savings account?? In bank, right??
Roughly, every 180 days, and rows of signs go up. A speculative bubble, based on how long it takes all of the owners in the whole neighborhood to default. One landlord tells us they just migrate on bad checks.
There are rolling hills with woodlands in Marion KY that are thick with game animals like wild turkey and deer. There are inexpensive places with freshwater near Eddyville or Murray. Why would you stay in a state that is full of urban morons coming after your guns and illegal aliens?
Some of the places that preppers live in just are not suited for agriculture as the rainfall is inadequate or it’s too chilly so your growing seasons are abbreviated. What are you waiting for?
In some of these KY country lots, you can either use the woods for fencing as well as putting up structures as well as sell it as timber to help pay for ready made housing materials.
No property is perfect but the best aspect is good rural neighbors who already have pantries and similar set ups. Lots of you could semi-retire on the proceeds after buying some Kentucky hobby farm and just raise black angus or hogs and have a garden.
The current homestead exemption is $37,600 off property tax assessment if you are 65 and or a disabled veteran.
I really don’t care about housing prices as I own mine debt free. I can’t lose money on something I don’t sell. Due to my location, I live in my “BOL”, there is no place else to go.
One question I have is, if the home builders don’t build “Affordable” housing how do they stay in business?
Some people see housing as an investment to make money.
IMO when you play that particular market you are merely
gambling and only the real estate brokers/agents win reliably.
My last thought is you need at least a year of normal income saved. Where you choose to keep it, or in what form, you need to have access to it, and it needs to be something directly acceptable to your suppliers as barter or currency. It is hard to make a mortgage payment with a 1 ounce Maple leaf coin. If I “top off” my truck they will take 40 silver dollars as payment accepted at face value for $40 of fuel.
bring that P/M’s to ME, and i will give you some FRN’s for it!