As I anticipated in my analysis last month, July new home sales hit their lowest level in six years for existing home sales, the lowest in seven years.
And for the four weeks ending August 21, new sales listings have dropped by 15%… the lowest since the beginning of Covid.
Backed by statements from chief economists at National Association of Home Builders and the National Association of Realtors, Barron’s recently declared unequivocally that “the housing market is in recession.” The chart tells all…
No doubt a major reason for the continued slowdown is that 30-year fixed mortgage rates have just spiked once again averaging 5.55%, according to FannieMae. A year ago, that rate was just 2.87%.
Last week, Redfin reported that cancellation of home sales contracts are on the rise, as median asking prices – and selling prices – are seeing a decline.
But all isn’t rosy for potential home buyers who can swing the rates – or have the ready cash to minimize the impact of them.
Chen Zhao, the lead economics researcher at Redfin stated,”Because the number of homes for sale is no longer rising, buyers’ newfound bargaining power is reaching its limit.”
Overall, most potential homebuyers are left with no other option but to rent… just as I anticipated in my “Landlord Nation” research.
And the news for those reluctant renters may soon be sunnier…
Even with low vacancy rates, most experts anticipate a leveling off of rental prices in the face of resistance on the part of cash-strapped tenants. But as an investor, I still see plenty of opportunities to take advantage of what I call the “Landlord Nation” trend.