by Karen Faulkner, Worthy News Correspondent
(Worthy News) – New data presents evidence of a US housing recession that is even worse than the Great Recession crash of 2008, Investorplace reports.
Thirty-year fixed mortgage rates are trending over 6% for the first time since 2008, and the demand for housing has dropped substantially from last year’s peak, Investorplace reports.
The National Association of Realtors (NAR) reported that home sales in July dropped by almost 20% year-over-year.
Meanwhile, the cost of renting a home has increased by almost 30% since last year.
“This reflects the fact that many would-be home-buying families are opting to rent instead of committing to a down payment on a house,” Investorplace said in its report.
Notably, the building and availability of homes are greater than the demand for them.
“The U.S. recorded a 10.4-month supply of new houses, the highest level since 2009,” Investorplace said.
“Housing starts over the past few years have also substantially outpaced household formation. That is to say, more homes are being built than there are households to buy them.”
According to Investorplace, the “most startling” factor in the current situation is the price-to-income (PI) ratios on homes: a median new home price of $438,067 and average hourly earnings of $27.32 puts the PI ratio at 16,035, the highest this figure has been since 2007-2009, when it was 14,923.
“Relative to wages, home prices are beyond reach for a majority of working Americans, meaning the demand for homes is unlikely to return without a substantial correction to real estate prices,” Investorplace said.
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