How are new home builders looking at the current housing market?
Home builder confidence plunged to their lowest levels since 2012, excluding the pandemic in 2020, according to a report from Forbes. The NAHB/Wells Fargo Housing Market index saw builder confidence drop eight points to 38, that’s just half the level it was six months ago.
Building material bottlenecks, rising interest rates, and elevated home prices were cited as reasons for lowered builder confidence. It was also mentioned that 2022 will likely be the first year since 2011 to see a decline in the number of new housing starts.
What do buyers & sellers need to know in the current market?
The housing market has gone from scorching hot to slowly cooling, and the change means that those in the market will need to gain new knowledge to compete. USA Today has a detailed profile of terms that are currently gaining in importance in the housing market. They cited ‘adjustable rate mortgage’, ‘contingency’, and ‘housing bubble’ as key terms that buyers and sellers need to make sure they’re educated on.
Is the current housing market showing ‘flashing red signs’?
According to the team at Realtor.com, 16 of the 20 signs of housing market bubble are flashing red. Their team also detailed how today’s housing market compares to the housing market in the 2000s. The short version is that the two markets are very different. There were nearly four times as many homes on the market in 2006 than in 2021. Home equity was very low for most buyers, and it’s at an all-time high right now. Mortgage rates were much lower in the 2000s than they are currently, and subprime loans, the types of loans that directly lead to the bubble, have all but been eliminated from the market.
There are indications of a slowing housing market, but we’ve yet to see anything close to the issues that were observed in the 2000s.
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