Real estate prices have declined over the past several months, but there could be much more to come, data and some experts indicate. The median home price has dropped by about 7 percent since its peak in June. It is still up by about 6 percent since October last year and more than 35 percent up since early 2020, according to data from Zillow, a listing site.
Other market metrics have recently dropped far more precipitously though. Sales volume, for instance, is down more than 24 percent since last year. Construction started on less than 120,000 private housing units in October, down from more than 150,000 in April, according to Census Bureau’s seasonally adjusted data (pdf). Prices of lumber, the most common residential construction material in America, dropped by nearly 70 percent since February and are now roughly at the early 2020 level.
The housing market has been pummeled by the Federal Reserve’s lifting of interest rates this year, which have boosted mortgage rates from less than 3 percent in September last year to more than 7 percent in early November. The rates have since eased to some 6.5 percent. This indicates that the market has yet to reach its bottom.
“We expect a drop of 15-to-20% over the next year, in order to restore the pre-Covid price-to-income ratio,” wrote Ian Shepherdson, chief economist at the Pantheon Macroeconomics in a note last week.
Fannie Mae’s Economic and Strategic Research (ESR) Group expects home prices to hit a low point in the second quarter of next year with a recovery the year after.
One major factor is that 80 percent of mortgage holders have locked in rates of at least two percent lower than the current rate which makes them unwilling to look for a new house, the ESR said in a recent forecast.
“The economy continues to slide toward a modest recession, which we anticipate will begin in the new year, with housing leading the slowdown,” said Doug Duncan, chief economist at Fannie Mae.
“Higher interest rates have ignited the typical reduction in residential fixed investment, which historically has led into either an economic slowdown or recession. From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession.”
Dropping house prices are bad news for those who bought theirs during the record-high prices of the past few years. They can easily find their mortgages underwater unless they put enough cash down.
Meanwhile, prospective homebuyers still don’t have much to look forward to because even at lower asking prices, houses will remain expensive when the higher mortgage rate is factored in. One factor keeping a bottom under the market is low inventory, currently some 36 percent below the October 2019 level.
“It’s hard to imagine a significant drop in pricing. Inventory is just too low,” commented Jonathan Miller, president and chief executive of Miller Samuel appraiser, in a recent Bloomberg interview.
Article cross-posted from our premium news partners at The Epoch Times.
Why One Survival Food Company Shines Above the Rest
Let’s be real. “Prepper Food” or “Survival Food” is generally awful. The vast majority of companies that push their cans, bags, or buckets desperately hope that their customers never try them and stick them in the closet or pantry instead. Why? Because if the first time they try them is after the crap hits the fan, they’ll be too shaken to call and complain about the quality.
It’s true. Most long-term storage food is made with the cheapest possible ingredients with limited taste and even less nutritional value. This is why they tout calories so much. Sure, they provide calories but does anyone really want to go into the apocalypse with food their family can’t stand?
This is what prompted the Llewellyns to launch Heaven’s Harvest. They bought survival food from multiple companies and determined they couldn’t imagine being stuck in an extended emergency with such low-quality food. They quickly discovered that freeze drying food for long-term storage doesn’t have to mean sacrificing flavor, consistency, or nutrition.
Their ingredients are all-American. In fact, they’re locally sourced and all-natural! This allows their products to be the highest quality on the market, so good that their customers often break open a bag in a pinch to eat because they want to, not just because they have to due to an emergency.
At Heaven’s Harvest, their only focus is amazing food. They don’t sell bugout bags, solar chargers, or multitools. They have one mission – feeding Americans in times of crisis.
What they DO offer is the ability for people to thrive in times of greatest need. On top of long-term storage food, they offer seeds to help Americans for the truly long-term. They want them to grow their own food if possible which is why they offer only Heirloom, Non-GMO, Non-Hybrid, Open-Pollinated seeds so their customers can build permanent food security on their own property.
Visit the Heaven’s Harvest website and use promo code “Patriot” for a discount today!
