U.S. Housing Market Seems Headed for a Prolonged Freeze

(TargetDailyNews.com) – Bidenomics has trickled down to the U.S. housing market and the latest data appears to indicate that a freeze is in the cards. Beyond the fancy economic terminology that banks and lawmakers try to keep voters confused with, one thing is easy to understand. Mortgages are becoming too expensive for anyone to afford.

A recent forecast from economists with Fannie Mae projects that housing stagnation may last into next year even if the economy avoids a recession. The report does not make a projection beyond 2024, and it seems to indicate a lose-lose scenario for all relevant parties.

If the U.S. economy is able to dodge the recession bullet, Fannie economists say the housing market will still be hindered by a shortage of for-sale homes combined with an overall lack of affordability. If a recession occurs, the lower home prices and interest rates likely to be found would be offset by “tighter credit” rules and a “weaker labor market.”

July data showed that sales of previously owned homes were down by almost 17 percent versus the same time in 2022. This has been attributed to the drastic climb in the cost of securing a mortgage. Rates currently sit at their highest point in twenty years. The 5.55 percent rate that was being offered one year ago has now soared to 7.23 percent.

The market has also been subjected to a supply shock. Those who otherwise would be willing to sell their homes to first-time buyers are opting not to do so. Potential sellers who locked in low rates years ago have no interest in having much higher monthly rates and payments forced upon them elsewhere.

On August 27th, Kevin O’Leary warned that September will usher in “real chaos” for the economy at large. The famed investor said that interest rate uncertainty would be responsible for the death of both the small business and housing markets.

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