Home buyer demand has fallen off a cliff in recent months. Data collected by the Mortgage Banker’s Association shows that mortgage applications for new home purchases are down 25% from February to June. This means that way fewer putting are in the market for a home now compared to four months ago. In fact, the mortgage purchase application figure is now back at mid-2019 levels.
This is occurring just as home builders are beginning construction on a record amount of new homes. Over the past 12 months over 1.55 million new housing starts have occurred according to data from the Office of Housing and Urban Development and the US Census Bureau. This means that the United States will have significantly more new home inventory hitting the market in late 2021 and early 2022.
On top of all this the cost of lumber, which was soaring for many months, has also started to crash. Its down 30% from its early May peak. Lower lumber prices mean that builders won’t have to charge as much to cover costs of new homes. They also mean that the narrative surrounding the housing market could shift into negative territory in coming months.
Mortgage Purchase Apps: https://www.investing.com/economic-calendar/mba-purchase-index-1494
Housing Starts: https://fred.stlouisfed.org/series/HOUST
Lumber Prices: https://www.nasdaq.com/market-activity/commodities/lbs
Housing Bubble Pt1 Inventory Deluge: https://youtu.be/VZfFM3Hcnz4
Housing Bubble Pt2 No Buyers: https://youtu.be/hVtbeoedQkI
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0:00 The Crash is Here!
2:55 Purchase Applications Plummeting
6:17 We’re Running out of Buyers
8:01 Inventory Deluge on the Way!
10:43 Completion? 6-18 Months
13:02 Lumber Prices Crashing
14:52 Negative Housing Market Narrative
17:01 Finding this Data on Your Own
#2021HousingCrash #HousingMarketBubble #RealEstateCrash