Home News U.S. Facing ‘Perfect Storm’ for 2008-Like Housing Crisis: Economist

U.S. Facing ‘Perfect Storm’ for 2008-Like Housing Crisis: Economist

by admin
0 comment

The United States faces the “perfect storm” of housing crisis Same as 2008According to Jose Torres, Senior Economist at Interactive Brokers.

Torres commented in an interview with an insider, and his analysis comes as a concern for the economy and the housing market. Remains an important issue For millions of Americans.House price Increased in the first half of 2022Inflation continues to affect almost every sector of the economy, but Torres warned that prices could plummet soon.

He predicted that house prices could fall by up to 25% within the next few years, starting to fall in early 2023 and seeing double-digit price declines.

According to Torres, the crisis is largely fueled by the construction boom that lasted throughout 2021. This summer is late) And the decline in housing demand. He described this phenomenon as “a timing lag between supply and demand.”

According to economist Jose Torres, the United States is facing a “perfect storm” of the 2008 housing crisis as demand declines. Above is a sign sold in Monterey Park, California on April 29, 2020.
FREDERIC J.BROWN / AFP via Getty Images

“Construction levels have been high for nearly a decade and demand is declining, creating a perfect storm in the real estate market,” Torres said.

He said many Americans can expect the fall in home prices to be “very similar to what we saw during the major financial crisis.”

“At this point, housing is not accessible given household and personal income,” Torres said. “The average monthly payment ratio between household and personal income is record high, similar to the level seen during the 2008 financial crisis.”

The collapse of the house Widespread impact on millions of AmericansIt can put financial stress on homeowners, potentially drive many into foreclosure, and adversely affect other sectors of the economy. Conversely, lower home prices associated with a crash are generally considered to be in favor of first-time buyers.

Torres was not the first economic expert to raise concerns about the near future of the housing market.

Stephen Moore, White House’s economic adviser to the Trump administration last week, said Collapse of housing market It’s a “big concern” for him.

“The mortgage rate was 3% a year and a half ago, but now it’s up to about 6%,” Moore said in an interview with Kitco News. “That alone means buying a $ 500,000 home will increase your 30-year mortgage payment by $ 200,000, which will put pressure on the home market. I hope it doesn’t collapse. . “

Jerry Howard, CEO of the National Association of Home Builders, Warning about “harsh” outlook For the housing market due to suspension of new construction during appearance fox work’ Varney & Co. Last Monday.

“Nationwide, builders are telling me that traffic is slowing down. They are telling me that they are letting people talk about canceling existing contracts,” he said. “From where I’m sitting, it’s a pretty tough outlook now.”

Uncertainty in the housing market adds to other economic instability that many Americans already feel. Inflation and gas prices soared in the United States in 2022, raising concerns among some economists. May be recession In the next few years.

You may also like