Housing Market News
You know that the economy isn’t doing well. I mean, come on!
We’re all feeling it in our pocketbooks. And it’s not just about your bank account either: there are a lot of people out of work and losing their homes because they can’t make ends meet. But don’t worry – even though things seem bleak right now, there’s still plenty to be optimistic about! Watch this video for five reasons why the economy might NOT be as bad as you think.
Pending Homes Sales Drop in June
-The number of signed contracts on existing homes fell in June.
-The latest data from S&P Case-Shiller shows that prices in May were 17% higher than they were a year ago.
-Mortgage rates shot upward in June, further adding to the affordability issue.
-Newly built houses, which closed in June were down 6.6% from May, and 19.4% from June 2020
Inflation Gauge up 3.5%
–An inflation gauge followed closely by the Federal Reserve increased 3.5% year over year in June, below the expected 3.6%.
-Consumer spending increased by 1% as personal income also rose faster than expected.
-When it comes to employment, the rate of inflation increased.
Record Lumber Prices Deliver HUGE Profits
-Lumber futures closed at $621.90(As of July 30th)
-At the peak lumber was going for $1,711.20 per 1,000 board feet, which was adding about $20,000 in building costs to a $200,000 house
-Mill executives say lumber prices could rise again due to the wildfires in British Columbia
If this housing market news has you worried about a possible housing bubble, you’re not alone. Housing prices are on the rise again and many Americans are unlikely to be able to afford homes if this trend keeps up. Lumber futures rose sharply earlier in the year due to COVID-19, which really hurt the supply chain with lumber mills.
Housing Supply is tight, and demand has been outpacing supply in many markets. Housing starts have been down for the past 4 months, and they have not kept pace with the growing demand for houses. Housing starts are an important measure of the demand for housing and if they don’t keep up with the growing demand then we could be at risk for a Housing Bubble Burst.
To make matters worse, as housing prices increase more homebuyers are turning to adjustable-rate mortgages, which could result in a Housing Bubble Burst if interest rates are raised and people can’t afford their monthly payments.