Housing Market Collapse Steepens: New Home Sales Keep Plunging As Inventory Surges To Highest Level Since 2009

Forbes ^ | August 23, 2022 | Jonathan Ponciano

[John W]

New home sales unexpectedly plunged much more than economists projected in July for the second month in a row, and amid the falling demand, rising home prices are starting to slow down—prompting experts to predict long-rising housing inflation could be due for a turnaround soon.

About 511,000 new single-family houses were sold last month on a seasonally adjusted annual basis, plunging 12.6% below the June rate of 585,000 and coming in sharply below analyst projections of 574,000, the Census Department reported on Tuesday.

Despite the plunging demand, prices actually recovered: The median sales price of new homes climbed to $439,400 last month from $402,400 in June, when prices tumbled to the lowest level in a year after a record high $458,000 in April.

A rash of data this summer has painted a challenging picture of the current housing market. Historically high savings and low interest rates drove record growth in home sales and prices during the pandemic, but the Federal Reserve's attempts to reduce inflation by raising interest rates have abruptly curtailed demand this year—even as prices have kept creeping up. "We're witnessing a housing recession in terms of declining home sales and home building; however, it's not a recession in home prices," National Association of Realtors economist Lawrence Yun said last week.

[T.B. Yoits]

Fixed property can be a liability if the local politicians decide your neighborhood would be diversity enhanced with illegal aliens, homeless people, meth users, and Communists such as Black Lives Matter^TM and Antifa.

[virgil]

They won’t be able to afford the rent either.

[bert]

Yor statement is true only in cities that were formerly America

[BfloGuy]

We have been in a growing housing bubble for several years. For once, it was nipped in the bud before it brought the rest of the economy crashing down. Now, the economy will likely go into recession if it’s not already there. But it won’t be housing’s fault.

[millenial4freedom]

I thought the housing market looked frothy in 2019 even before the pandemic stimulypto from the Federal Reserve kicked in. 5%+ annual appreciation in home values has been the norm since 2012.

[GOPJ]

Your daughter’s making the right choice. Being able to delay gratification is a necessary component of creating wealth. A $3,000 apartment if often nicer and EASIER than a house with a $3,000 mortgage. But 10 years down the road and the owner has it all over the renter.

[AnotherUnixGeek]

Have you looked into Prescott or Prescott Valley AZ? Big time Trump country, especially PV.

Currently looking at the area north of Dallas - lots of house for the money, and it fits with my current job. But I'll check out Prescott AZ, already looked at Scottsdale and Mesa.