After a long run of strong sales, it looks like the housing market is starting to head downwards. Reuters reports that “U.S. homebuilding fell to a one-year low in September,” after natural disasters plagued the southern part of the country.
This decline in the housing market may be disproportionately skewed towards the consequences of the hurricanes, but there may be other underlying issues that could make this housing decline last longer.
Marketwatch writes that:
For one thing, rising prices have put off a lot of buyers. The income of the average American is rising almost 3% a year, government figures show, but the cost of new homes is climbing almost twice as fast. Mortgage rates, though still low, are also moving higher. Builders and real-estate agents have also complained for years about more red tape, tighter lending standards and a scarcity of inexpensive lots to build on. Those problems haven’t gone away.
These are just a few of the issues that Marketwatch points to (read more here) but the fact of the matter is that the housing market is showing some worrying signs. While the stock market may continue to rise, if the real estate market deteriorates further, it could prove to be the catalyst that slows the markets down.
Unless the issues with the housing market are solved, we could see real estate begin to stagnate. The sector is in desperate need of new technology and effective analysis of the issues it currently faces if it hopes to turn things around. Until then, home owners should be prepared for a cooling market in the near future.
To read Reuters’ report on the housing market’s one-year low, click here.
To read Marketwatch’s article on the weakening housing market, click here.
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