US housing is all of a sudden cooling very quickly. US Census data shows single-family home sales fell for a third consecutive month in June. The decline in sales helped to push new housing inventory to pre-pandemic levels. Prices are still elevated, but they did give back a significant amount of gains last month.
US New Home Sales Fell For A Third Month
US new single-family home sales fell for a third consecutive month, as housing cools. There were 676,000 new homes sold in June at the seasonally adjusted annual rate (SAAR). This is 6.6% lower than the month before, and a whopping 19.4% lower than last year at this time. The market hasn’t seen such a low volume of sales since April 2020, when the pandemic first started. A little odd considering how different the economy (and housing!) has been since then.
US New Home Sales
The seasonally adjusted annual rate (SAAR) of US new home sales.
Source: US Census; HUD; Better Dwelling.
US New Housing Inventory Surges To Pre-Pandemic Highs
Inventory of new homes across the US went from scarce to nearly oversupplied in a few months. There were 6.3 months of supply in June, the highest level seen all pandemic, and on the high end of balanced. If it smashes through 7 months of inventory, it would technically turn into a buyer’s market. That’s when prices are expected to fall, or sellers start giving more concessions.
US New Housing Sees Median Price Roll Back To March Levels
Speaking of falling prices, new home prices slipped a little lower last month. The median sale price fell to $368,800 in June, down 3.12% from the month before. Prices are still 8.12% higher, but that’s a sharp pullback from May’s all-time high. In just a month, they rolled all the way back to the lowest level since March.
US Median New Home Prices
The median price of a new home sold in the United States.
Source: US Census; HUD; Better Dwelling.
The US new home market is starting to look a little healthier with rising levels of inventory. Prices are still fetching a very large premium compared to just a year ago. If falling sales and higher inventory continue, it’s not hard to see a chunk of that premium disappear soon.
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Healthy Real Estates market. Nothing like in Canada, no slavery.
It’s going to be even more inventory in the us as mortgage moratorium ends at the end of July.
Plenty of new houses, plenty of old once, plenty of land to build. Freedom! No slavery, no monopoly of elite government, free enterprise as much as it can be.
Affordability of anything increases: gasoline, cars, plane tickets, internet, housing of any kind from 30k up to 100 millions. Education: much easier to get into Law School, Medical school, Ivy business, and so on.
That’s not a bubble. This is a bubble, eh.
**gestures to look around Canada*
Major Crash Factors for the US Housing Market in 2021:
buyer fatigue builds to a truly precipitous point where any event could start the slide
construction picks up quickly
oil and energy prices soar too high causing crash fears
speculators believe its time to fully back out of the housing market
rising tax hikes begin to hit middle income earners
home prices ridiculously high and hit a point where they are completely unsustainable
government takes radical move to “correct the situation” for demanding homebuyers
China/US conflict sends stock markets crashing (invasion/war maneuvers)
Russia steps up careless behavior toward the accusatory Biden regime
economy goes into high speed wobble inviting drastic government intervention for debt issues
big rise in tax on corporations and billionaires causes wealth to flee the country
stock market at peak volatility and earnings outlooks dive (investors tuned to earnings now only)
bankers quickly anticipate trouble and begin tightening mortgage lending with higher rates
end of moratorium leads many homeowners, landlords, cities, and renters into desperate bankruptcy situation
the Fed has to raise interest rates too quickly in 2022 to cover debt/capital needs, and given the size of home loans, a 1% increase would create defaults and panic selling
countries around the world plunge into bankruptcy while their economies stall
debt in the cities most likely to crash hits a critical point
Republicans gain new power in 2022 elections and begin shutting down the Democrats
Republicans block excessive spending (their belief that it’s frivolous and wasteful)
a return to globalism which would wipe the US dramatic gains of the last 3 years
“America First” dream fades accompanied by dramatic drop in purchases of China products (trade war) and high cost business environment for US companies
single-family housing construction permits decline spooking home sellers
homeowners who have hung on forever to sell, begin to find somewhere else to live and begin selling en masse
massive student loan and personal debt defaults
Trump investment tax breaks end with nothing to follow them
yield curve inverts again thus scaring the financial community