NW: US Housing in a Meltdown

Newsweek headline: U.S. Housing Market Is in a ‘Meltdown’: Economist


“Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home,” association chairman Jerry Konter said in a statement.

In the release, NAHB Chief Economist Robert Dietz said the challenge of affordability has priced out a significant portion of home purchasers from the market and warned that supply-side issues need to be addressed in order to tackle the issue of affordable housing.

Dietz isn’t alone in his view. Moody’s Analytics Chief Economist Mark Zandi also recently told Newsweek, “High mortgage rates are combining with high house prices, and affordability is being crushed. So, first-time homebuyers are getting locked out of the market.”


U.S. Housing Market Is in a ‘Meltdown’

The headline is misleading. A sudden downturn in housing construction only means one thing: Tighter supply, and less housing affordable.

Here are Jerry Konter’s own words before House Ways and Means Committee Hearing on the Housing Crisis. (Jul 2022)
“The housing affordability crisis is driven by one factor: as a nation, we have failed to produce enough housing to keep up with demand."

Foreign money pouring into US real estate continues. The amount of foreign capital chasing real estate coming in through Canada (#1 foreign source) increased 115% in 2021. With continued foreign money seeking safe haven in US real estate and reduced supply, only means one thing: higher housing prices.

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