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The entire housing market is about to collapse. That might sound like a bold claim, but it’s backed by irrefutable evidence. Almost every housing indicator is showing terrifying signals. We’re talking about record-low mortgage applications, skyrocketing evictions, low consumer confidence, bankruptcies, and a home-building bubble. The housing market was built on pillars of sand and all of those pillars are all about to crumble. Within the next 12 months, the world is going to wake up to the complete disintegration of the housing market. At the end of this video, I’ll cover exactly which cities will experience the most pain from the impending housing crisis.
According to the National Association of Home Builders, the US is already in a housing recession. Because of the massive appreciation of home prices in the past decade, home building has taken off in a bubble-like fashion. New privately-owned houses under construction are at an all-time high. That’s right, an all-time high. Over 1.6 million housing units are under construction, which is 12.5% higher than that of the 2008 housing bubble. Hundreds of thousands of houses are going to go on sale in the next few months, and there are not going to be any buyers. Housing sales are currently plummeting month after month. New single-family sales have dropped to a 5-year low of only 500 million units per year. So not only do we have a record-high supply but also shrinking demand. According to consumer confidence surveys, US citizens no longer believe in elevated housing prices. The Wells Fargo US Housing Market Index tracks the price confidence of single-family home buyers. The Wells Fargo index has dropped for 8 consecutive months to just 49 out of 100. That’s a frightening trend that puts housing confidence on track to levels similar to the 2008 recession. Throughout this video, I’m going to be ranking every indicator from 1 to 10 on the top right of the screen. Make sure to stick around to the end of the video to see my final assessment. The Wells Fargo index is not the only indicator showing an alarming trend. Surveys nationwide are all pointing toward the fact that consumer confidence is extremely low. The horrifying consumer sentiment is best exemplified by Fannie Mae’s national housing market survey. According to the survey, 79% of US citizens think it’s a bad time to buy houses. On the flip side, only 17% of citizens believe it’s is a good time to buy houses. The difference between the two percentages is the worst that Fannie Mae has ever seen since the survey’s creation in 2012. The reason why this all matters is because consumer confidence is a self-fulfilling prophecy. When everyone thinks that the housing market is going to crash, prices will inevitably crash. Mortgage applications are now plummeting to record lows. According to the Mortgage Bankers Association, mortgage demand has fallen to the lowest level in 22 years. One of the key reasons for low consumer confidence is rising interest rates. Because mortgage rates are rising to record heights, mortgage applications are dropping like flies. Federal Reserve Chair Jerome Powell recently remained adamant about raising interest rates at all costs. People thought that Powell would pivot and suddenly start printing money again, but Powell’s recent speech at Jackson Hole shows otherwise.
Powell will continue raising interest rates regardless of how much the US economy crashes. This will knock over the housing market’s pillars for one reason: capitalization rates. During the past decade, institutions flooded toward the housing market to create investment products. The National Association of Realtors found that institutional buyers represented 13% of residential sales in 2021, up from just 11.8% in 2020. Firms like Blackstone have expanded into the real estate market, with billions of dollars of new housing units being acquired. The primary reason why institutions flocked toward housing is because of capitalization rates, or cap rates in short form. Cap rates are calculated by taking the rental income that a property receives and dividing it by the property’s market value. If a house is worth $1 million and the rental income is $40,000 per year, the cap rate would be 4%. Powell is adamant about raising rates to 4% by 2023, which puts immense pressure on the rental market. According to the CBRE Group, the average multi-family property cap rate was roughly 4.6% in the fourth quarter of 2021. This means that the average multi-family property earns 4.59% annually from rental income. As interest rates increase in the future, real estate investors will see their profit margins shrink significantly.
Follow my Twitter for more financial content: https://twitter.com/casgains
For business inquiries, please email founders @casgainsmedia.com
The entire housing market is about to collapse. That might sound like a bold claim, but it’s backed by irrefutable evidence. Almost every housing indicator is showing terrifying signals. We’re talking about record-low mortgage applications, skyrocketing evictions, low consumer confidence, bankruptcies, and a home-building bubble. The housing market was built on pillars of sand and all of those pillars are all about to crumble. Within the next 12 months, the world is going to wake up to the complete disintegration of the housing market. At the end of this video, I’ll cover exactly which cities will experience the most pain from the impending housing crisis.
According to the National Association of Home Builders, the US is already in a housing recession. Because of the massive appreciation of home prices in the past decade, home building has taken off in a bubble-like fashion. New privately-owned houses under construction are at an all-time high. That’s right, an all-time high. Over 1.6 million housing units are under construction, which is 12.5% higher than that of the 2008 housing bubble. Hundreds of thousands of houses are going to go on sale in the next few months, and there are not going to be any buyers. Housing sales are currently plummeting month after month. New single-family sales have dropped to a 5-year low of only 500 million units per year. So not only do we have a record-high supply but also shrinking demand. According to consumer confidence surveys, US citizens no longer believe in elevated housing prices. The Wells Fargo US Housing Market Index tracks the price confidence of single-family home buyers. The Wells Fargo index has dropped for 8 consecutive months to just 49 out of 100. That’s a frightening trend that puts housing confidence on track to levels similar to the 2008 recession. Throughout this video, I’m going to be ranking every indicator from 1 to 10 on the top right of the screen. Make sure to stick around to the end of the video to see my final assessment. The Wells Fargo index is not the only indicator showing an alarming trend. Surveys nationwide are all pointing toward the fact that consumer confidence is extremely low. The horrifying consumer sentiment is best exemplified by Fannie Mae’s national housing market survey. According to the survey, 79% of US citizens think it’s a bad time to buy houses. On the flip side, only 17% of citizens believe it’s is a good time to buy houses. The difference between the two percentages is the worst that Fannie Mae has ever seen since the survey’s creation in 2012. The reason why this all matters is because consumer confidence is a self-fulfilling prophecy. When everyone thinks that the housing market is going to crash, prices will inevitably crash. Mortgage applications are now plummeting to record lows. According to the Mortgage Bankers Association, mortgage demand has fallen to the lowest level in 22 years. One of the key reasons for low consumer confidence is rising interest rates. Because mortgage rates are rising to record heights, mortgage applications are dropping like flies. Federal Reserve Chair Jerome Powell recently remained adamant about raising interest rates at all costs. People thought that Powell would pivot and suddenly start printing money again, but Powell’s recent speech at Jackson Hole shows otherwise.
Powell will continue raising interest rates regardless of how much the US economy crashes. This will knock over the housing market’s pillars for one reason: capitalization rates. During the past decade, institutions flooded toward the housing market to create investment products. The National Association of Realtors found that institutional buyers represented 13% of residential sales in 2021, up from just 11.8% in 2020. Firms like Blackstone have expanded into the real estate market, with billions of dollars of new housing units being acquired. The primary reason why institutions flocked toward housing is because of capitalization rates, or cap rates in short form. Cap rates are calculated by taking the rental income that a property receives and dividing it by the property’s market value. If a house is worth $1 million and the rental income is $40,000 per year, the cap rate would be 4%. Powell is adamant about raising rates to 4% by 2023, which puts immense pressure on the rental market. According to the CBRE Group, the average multi-family property cap rate was roughly 4.6% in the fourth quarter of 2021. This means that the average multi-family property earns 4.59% annually from rental income. As interest rates increase in the future, real estate investors will see their profit margins shrink significantly.
The houses are still sky rocketing while these fools make these videos
I think calling this a housing crash is the wrong way to approach this. It's not the same as previous "crashes" and we're going to see a much different response from consumers & investors, but the counter measures will remain the same and mostly retroactively implemented while consumer and investor reactions will rock the boat. The pressures on the rental market will result in a premature and almost COMPLETE economic pull out from the majority of lower middle class households. No more shopping…gardening, farming and fabrication will start in a lot of developing self-sustainable rural communities and the guy making those mud house videos on YT will be getting a lot more views.
in 50 years we'll basically have two different types of human civilization. 100 years and we'll almost be different species. Might sound like sci-fi, but I believe it's happening aws.
I love to see housing crash but, trust me, you will be lucky to see 20%+ drop in highly desired neighborhoods. It ain't gonna happen. Mark my words.
india housing market rate just double
Doesn't this guy have a part-time job as a scammer and sector 5 india?
Didn't this clown just tell us last month that China was about to collapse in like 27 days which passed us by a few weeks ago? What a clown
Biden should have Retired, He clearly is not Fit mentally to Run America!! Biden worse POTUS ever. FJB we need to Revoke all of his exe Orders.
I thought China was going to collapse in 30 days? That was months ago
I live in Australia which is one of the most overpriced housing markets in the world. A complete scam. I hope it drops over 50% to become affordable and realistic affordable homes
It's too bad, you missed an opportunity to mention the Mega Drought.
Housing in Las Vegas with no water… forget about it…. supporting a large population in a Dessert… Historically not a good idea.
YOU NEED WATER TO LIVE
investor: supply is low so it cant crash
powell: hold my beer…
Something is definitely wrong with the markets-look at the gbp today – but if suddenly everyone rushed to bonds to abandon other investments, that would increase demand for bonds and raise bond prices.
housing market is definitely super crazy in Montana right now, sold our house for under half a million and now it's on the market for 850 grand. Everyone who didn't sell their house for a high price has already moved away or bought a nice little shack for normal house price.
I had a brilliant economic professor in college. He had a gift of explaining the markets. This is all planned. The Fed is a bank, their priorities are not the same as those of the population. The crash of the housing market is good for them, and Wall St. That's why Powell doesn't seem to give a damn. The housing market crash frees up real property capital to be swooped up by the likes of Blackrock and the banks. They must convert their M2 and Pandemic relief fund to real assets. That's what's happening. I happens every recession, which we are already in. Afterwards, the housing property is reversed in value and we must now rent from them. As we no longer can afford to own. This was planned by the WEF and banks.
You made an error, that's New Mexico, not Arizona.
How does the Canadian housing market look?
Got hyperbole ?
Multi family buildings should keep appreciating, right?
Hahaha if you didn’t get fixed your “SUPER” smart lol
Only Goddess mother nature knows when it will be all over. But I think Biden is the enlightened one and will manage to navigate through the ultra right MAGA republicans and will do a lot to save the planet undoing some of the damage to the planet that Trump and his lover dictators around the glove did to destroyed the planet in just 4 Trump years.
Hey Id*ot, raising interest rates is designed to stop loans & stop Real Estate Purchases. U Stop pretending USA is CCP Real-Estate in China!
No matter the stock/house market crash one needs to have different portfolio, I already invested in Forex and Crypto which are really profitable
Can u do video on canadian housing?
i added vpn