Housing Market Collapse 2.0 Has Begun
By David Haggith
TheGreatRecession.info
July 18, 2018
A summer storm is gathering against the housing market all across the US. More than a year ago, I predicted the collapse of Housing Bubble 2.0 and then predicted as soon as the housing market collapse had begun that it would see temporary reprieve until the summer of 2018.
Well, that reprieve has ended … two months ahead of the schedule I suggested as an outlier. The storm clouds are now evident across the entire nation. More importantly, lightning is already striking in the nation’s healthiest housing markets.
New-home construction deconstructs the housing market
New-home-construction starts are down 12.3% nationwide to a nine-month low due to the largest single-month drop in more than year and a half. That is a huge sign of a nationwide housing market collapse when you consider that this is the time of year when housing is usually on a tear because weather allows construction everywhere. Instead, construction in the US is down … way down … EVERYWHERE.
While that nine-month period back to the last low in construction was merely propped up by hurricane and wildfire rebuilds, as I said it would be (see articles listed below), we’ve already hit the point where those necessary rebuilds (still happening) are not strong enough to overcome the more general housing decline that is overtaking the nation and many other nations. Significant to that point, housing starts fell in all regions of the country. Both single-family and multi-family housing construction are losing momentum.
As an even clearer sign of where we are headed in the near future, housing construction permits are also down … for the third count (third month in a row). So, the decline in permits is now a trend. While single-family permits saw a small gain of 0.8% in June, multi-family permits dropped 7.6%. June had been expected by economists to bring a rebound that didn’t materialize, setting a new trend firmly in place.
Mortgage applications also fell nationwide this week.
Emaciated housing inventory is wasting away even as sales slide
Fewer new homes being built will likely translate into shrinking inventory of new homes on the market in the months ahead. This broad-based decline comes in spite of that fact that everyone across the nation has been saying for over a year that inventory of homes on the market is skinny at best. So, it is skinny and now declining rapidly in health at a time when you would expect new construction to pick up in order to fill out the historically thin inventory of homes on the market.
Why is that not happening?
Even more important in terms of seeing where we are on the curve of the housing-bubble wave, real estate sales in some of the most robust markets, such as Seattle, have actually started to see decline: (Seattle was one of the slowest areas to decline during the last housing market collapse, one of the areas that fell the least during that collapse, and was one of the areas that was first to recover.
The Rest…HERE
