🏘 Housing Bubble v 2.0: What Does It Mean for US Stock Market
Much to the chagrin of would-be homebuyers, property prices just keep rising. It seems nothing - not even the highest mortgage rates in nearly 23 years — can stop the continued climb of home prices.
Prices increased once again in July, according to the latest S&P CoreLogic Case-Shiller home price index, with 19 out of 20 markets measured showing month-over-month gains. In another reflection of ongoing increases, the National Association of Realtors (NAR) says more than half of U.S. metro areas registered home price gains in the second quarter of 2023.
So much for the idea that a "housing recession" would reverse some of the outsized price gains in homes. The U.S. housing market had finally started slowing in late 2022, and home prices seemed poised for a correction. But a strange thing happened on the way to the housing crash: Home values started rising again.
NAR reports that median sale prices of existing homes are near record highs. Home prices in August 2023 rose 3.9 percent year-0ver-year to reach $407,100 — near the all-time-high of $413,800, and only the fifth time any monthly median has eclipsed the $400,000 mark since NAR began keeping records.
The housing recession is essentially over, or has just began!?
Home values have held steady even as mortgage rates have soared past 7 percent, reaching their highest level in more than 20 years in August. The culprit is a lack of housing supply. Inventories remain frustratingly tight, with NAR’s August data showing only a 3.3-month supply.
30-Year Fixed Mortgage Interest Rates Turn Higher, as 200-Month SMA Key Resistance was broken earlier in 2022.
Average Annual Mortgage Interest. 30 000 U.S. Dollars Rubicon is at the hands.
After the Federal Reserve’s meeting in June, Fed Chairman Jerome Powell told reporters he was keeping a close eye on the housing market.
"Housing is very interest-sensitive, and it’s one of the first places that’s either helped by low rates or held back by higher rates," - Powell said in the press conference.
"We’re watching that situation carefully."
Housing economists and analysts agree, regardless, that any market correction is likely to be a modest one. No one expects price drops on the scale of the declines experienced during the Great Recession.
Is the housing and stock markets are going to crash?
The last time the U.S. housing market looked so frothy was back in 2000s. Back then, home values crashed with disastrous consequences. When the real estate bubble burst, the global economy plunged into the deepest downturn since the Great Depression. Now that the housing boom is threatened by skyrocketing mortgage rates and a potential recession so buyers and homeowners are asking a familiar question: Is the housing market about to crash?
5 reasons ("cast in bronze") there will be no housing market crash
1. Inventories are still very low.
2. Builders didn’t build quickly enough to meet demand.
3. Demographic trends are creating new buyers.
4. Lending standards remain strict and impose tough standards on borrowers.
5. Foreclosure activity is muted: In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices, and it’s nothing like it was two decades ago.
Funny, but all of that adds up to the one only consensus: Yes, home prices are still pushing the bounds of affordability. But "Ooh not", this boom shouldn’t end in bust. 😏
History does not repeat itself. But often rhymes.
Technical graph for
USSFHP - U.S. Single Family Home Prices illustrates there has been a while, without new all time highs in Top Four U.S. Stock market indices while Housing Bubble was exist in 2000s.
So lets see, will be the same in 2020s or not, while 2023 is a second straight year without new all time peaks in S&P500
SPX, in Nasdaq-100 
NDX, in Dow Jones Index 
DJIA as well as in Russell 2000 Index 
RUT
Prices increased once again in July, according to the latest S&P CoreLogic Case-Shiller home price index, with 19 out of 20 markets measured showing month-over-month gains. In another reflection of ongoing increases, the National Association of Realtors (NAR) says more than half of U.S. metro areas registered home price gains in the second quarter of 2023.
So much for the idea that a "housing recession" would reverse some of the outsized price gains in homes. The U.S. housing market had finally started slowing in late 2022, and home prices seemed poised for a correction. But a strange thing happened on the way to the housing crash: Home values started rising again.
NAR reports that median sale prices of existing homes are near record highs. Home prices in August 2023 rose 3.9 percent year-0ver-year to reach $407,100 — near the all-time-high of $413,800, and only the fifth time any monthly median has eclipsed the $400,000 mark since NAR began keeping records.
The housing recession is essentially over, or has just began!?
Home values have held steady even as mortgage rates have soared past 7 percent, reaching their highest level in more than 20 years in August. The culprit is a lack of housing supply. Inventories remain frustratingly tight, with NAR’s August data showing only a 3.3-month supply.
30-Year Fixed Mortgage Interest Rates Turn Higher, as 200-Month SMA Key Resistance was broken earlier in 2022.
Average Annual Mortgage Interest. 30 000 U.S. Dollars Rubicon is at the hands.
After the Federal Reserve’s meeting in June, Fed Chairman Jerome Powell told reporters he was keeping a close eye on the housing market.
"Housing is very interest-sensitive, and it’s one of the first places that’s either helped by low rates or held back by higher rates," - Powell said in the press conference.
"We’re watching that situation carefully."
Housing economists and analysts agree, regardless, that any market correction is likely to be a modest one. No one expects price drops on the scale of the declines experienced during the Great Recession.
Is the housing and stock markets are going to crash?
The last time the U.S. housing market looked so frothy was back in 2000s. Back then, home values crashed with disastrous consequences. When the real estate bubble burst, the global economy plunged into the deepest downturn since the Great Depression. Now that the housing boom is threatened by skyrocketing mortgage rates and a potential recession so buyers and homeowners are asking a familiar question: Is the housing market about to crash?
5 reasons ("cast in bronze") there will be no housing market crash
1. Inventories are still very low.
2. Builders didn’t build quickly enough to meet demand.
3. Demographic trends are creating new buyers.
4. Lending standards remain strict and impose tough standards on borrowers.
5. Foreclosure activity is muted: In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices, and it’s nothing like it was two decades ago.
Funny, but all of that adds up to the one only consensus: Yes, home prices are still pushing the bounds of affordability. But "Ooh not", this boom shouldn’t end in bust. 😏
History does not repeat itself. But often rhymes.
Technical graph for
USSFHP - U.S. Single Family Home Prices illustrates there has been a while, without new all time highs in Top Four U.S. Stock market indices while Housing Bubble was exist in 2000s. So lets see, will be the same in 2020s or not, while 2023 is a second straight year without new all time peaks in S&P500
SPX, in Nasdaq-100 NDX, in Dow Jones Index DJIA as well as in Russell 2000 Index RUT
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