Economist Reveals Dire Prediction For US Housing Market
Ever since the impact of the COVID-19 pandemic, the U.S. housing market has faced a long period of turmoil. The United States Census Bureau explains that in March of 2020, when the entire country's economy shut down due to COVID-19, the housing market quickly came to a halt. As soon as the strict protocols were lifted, however, a new home buying frenzy emerged as many Americans gained the opportunity to invest and move to new areas due to their recently developed online working positions. The summer of 2020 was a significant selling period for the housing market, but unfortunately, the supply could not keep up with the demand.
Over the years, a massive drop in sales has occurred as the competition continued to grow within the housing market. CNBC mentions that it is now so extreme that home buyers no longer have any power when it comes to the price of their new houses. In fact, many homes are now double their cost last year. Finally, in May 2022, the housing market faced its all-time low and only continues to decrease. According to the New York Post, millions of future home buyers are left hoping for a change in the near future. Here's what economists are predicting.
The housing market meltdown
As much as you may hope for an optimistic prediction for the future of the United States housing market, data shows that it is on the verge of a complete meltdown. The New York Post states that with sales continuously decreasing, there is a major risk of a collapse in home builder confidence, which is bound to occur soon. Chris Highland further explains that home builder confidence drops when the state of the economy declines to prevent the continuation of projects that risk not being met with the reward they need to pay for materials and employees.
This means that when home builder confidence collapses, so does the continuation of their residential building projects. Ultimately, with fewer homes being constructed, the housing market is bound to reach its predicted meltdown. As reported by the New York Post, Chief Economist Ian Shepherdson acknowledges the sales decline in the U.S. housing market but cites that the construction industry is "in denial about the extent of the drop in demand." But on a larger scale, however, many economists predict that as the housing market continues to slow down, prices will eventually drop again to bring a correction to the overall economic state of the United States.