There’s a lot of talk about housing prices going to collapse, but it’s not likely. Here’s why

Are Housing Prices About to Collapse? Probably Not, and Here's Why

The housing statistics released this morning were not very good. The headline number of housing starts fell by around ten percent from last month, which was much worse than the consensus estimate of a decline of around three percent. However, the building permits number came in slightly higher than expected, and it shows that the house building boom is over. Despite this, it’s still not clear if the housing market is going to collapse.

The numbers were worse than expected, but they weren’t surprising. The Fed has raised rates twice in the past couple of months, and mortgage rates are now higher than the lows that fueled the boom. This makes homes more expensive for people who can’t afford to just pay cash. Another reason why potential buyers are reluctant to enter the market is that the interest rate on a home loan is now higher than the one they used to pay.

For the last six months, television pundits have been talking about a potential recession. This is a frightening thought for consumers and homebuyers, as it reminds them of the Great Recession of 2008. During that period, housing prices collapsed and unemployment spiked.

During the past couple of years, the housing market has been growing significantly. Unfortunately, many potential buyers are still reluctant to enter the market. They’re afraid that they might be hitting the top of the market.

The logic behind this argument is that rising interest rates and talk of a potential recession will cause house prices to collapse. However, despite the increasing number of economists and pundits talking about a potential recession, housing prices are still rising. Even though the rate of increase has started to slow down, the demand for housing and the prices are still high.

The main reason why house prices have been rising over the past two years is due to the lack of supply. The combination of labor and commodity shortages has been holding back the housing market’s growth. Homebuilders have tried to ramp up their output after slashing back on their production in 2020, but these efforts have not yet been successful.

A bigger-than-expected drop in housing starts could be caused by the lack of supply. It could also be a sign that the demand for housing is still not being met. This would be good for prices as it would help prop them up even with the rising interest rates.

It’s also possible that the lack of supply is forcing builders to reduce their output and wait for orders to come in. If this is the case, it means that the demand for housing is still not being met. A recent survey showed that the sentiment of homebuilders has dropped to a level that’s below 50, which is a negative sign. However, it’s not surprising given the various problems that the market has been experiencing.

As homebuilders, we all know that the rising interest rates and the gloomy economic forecasts have affected our industry. However, these predictions aren’t yet true, and there’s a growing belief that they won’t be happening in the near future.

One of the biggest threats to the housing market is the increasing number of pundits and economists who believe that house prices will collapse. This can lead to a decline in the prices of homes. It’s also possible that the days of crazy bidding wars are over, but there’s still a shortage of housing.

Despite the various factors that have affected the housing market, house prices are still expected to stay stable. Unless a full-blown recession occurs, housing prices will not be dropping anytime soon.