The Economist: U.S. Facing 'Perfect Storm' for 2008-Like Housing Crisis

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A housing crash could have far-reaching impact on millions of Americans, adding economic stress on homeowners, potentially forcing many to go into foreclosure and potentially having a negative impact on other sectors of the economy. On the flip side, the lower housing prices that come with a crash are generally viewed as favorable to first-time buyers.

Torres is not the first economic expert to raise concerns about the near future of the housing market.

Last week, Stephen Moore, who served as a White House economic adviser during the Trump administration, said a housing market crash is a "big concern" for him.

https://www.newsweek.com/us-facing-perfect-storm-2008-like-housing-crisis-economist-1728011
 
Interest rate hikes will make mortgage payments impossible for many.

The homeless will be squatting in your house, maggot.


Haw, haw............................haw.
 
lots of dynamics in play here.

prices are already falling, sales are already down 20% and high interest isnt going away very soon.

all this makes it hard for someone already in a home to move because selling is hard and your equity is down quite a bit so you wont move if you dont have to.
that means new construction will drift off dragging a whole other market into the mix.

lots of dominoes to fall, all of them bad.
 
Maybe the guy will be right but here's my issue with what he's saying. In 2008 we had the perfect storm of rising interest rates and and all those teaser loans coming due at the same time. That isn't the case today. Far more discipline in lending practices and far more people have built up equity in their homes to withstand a slow down. I also disagree with the idea that we overbuilt. We still haven't built enough housing in this country. And demand may slow because of rising rates but demand for housing is still strong.

I'm not suggesting prices won't drop. We've already seem permits and new housing starts fall. But as of now, it's not looking like massive price drops.
 
Primavera said:
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A housing crash could have far-reaching impact on millions of Americans, adding economic stress on homeowners, potentially forcing many to go into foreclosure and potentially having a negative impact on other sectors of the economy. On the flip side, the lower housing prices that come with a crash are generally viewed as favorable to first-time buyers.

Torres is not the first economic expert to raise concerns about the near future of the housing market.

Last week, Stephen Moore, who served as a White House economic adviser during the Trump administration, said a housing market crash is a "big concern" for him.

https://www.newsweek.com/us-facing-perfect-storm-2008-like-housing-crisis-economist-1728011
Click to expand...

Your headline implies the story is from the British journal, "The Economist." It is a Newsweek article citing someone who is an economist.
 
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Primavera said:
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A housing crash could have far-reaching impact on millions of Americans, adding economic stress on homeowners, potentially forcing many to go into foreclosure and potentially having a negative impact on other sectors of the economy. On the flip side, the lower housing prices that come with a crash are generally viewed as favorable to first-time buyers.

Torres is not the first economic expert to raise concerns about the near future of the housing market.

Last week, Stephen Moore, who served as a White House economic adviser during the Trump administration, said a housing market crash is a "big concern" for him.

https://www.newsweek.com/us-facing-perfect-storm-2008-like-housing-crisis-economist-1728011
Click to expand...




The fundamentals are not screwed up like back in 2008
 
cawacko said:
LOL. Dem rose colored idiot glasses? What does that even mean?

I gave my response as to why I don't think pricing will drop 25% or whatever he is projecting.
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your response seemed nonresponsive.

because people are .... something? loans are not raising rates all at once?
 
cawacko said:
LOL. Dem rose colored idiot glasses? What does that even mean?

I gave my response as to why I don't think pricing will drop 25% or whatever he is projecting.
Click to expand...

Jose Torres predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.
 
Primavera said:
Jose Torres predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.
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I certainly can't predict the future but we had like a 33% drop in housing prices during the Great Recession. The fundamentals are not near the same today. I just don't see it.
 
It will be interesting to see what happens as a result of the Revolution hammering landlords and eliminating single family housing zoning. The next thing they would like to do is to remove a lot of housing from private ownership and place it with WOKE run non-profits, though it is not clear to me how they intend to get there.
 
Hawkeye10 said:
It will be interesting to see what happens as a result of the Revolution hammering landlords and eliminating single family housing zoning. The next thing they would like to do is to remove a lot of housing from private ownership and place it with WOKE run non-profits, though it is not clear to me how they intend to get there.
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Removing single family zoning will likely not do much but it’s an excellent move. Nothing to do with “revolution”. Major urban areas need increased density, not a large number of single family homes. NIMBYism is a scorn on society and plays a major role in why housing prices are what they are. NIMBYism isn’t exclusive to Boomers but Boomers have an advanced degree in it
 
Primavera said:
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A housing crash could have far-reaching impact on millions of Americans, adding economic stress on homeowners, potentially forcing many to go into foreclosure and potentially having a negative impact on other sectors of the economy. On the flip side, the lower housing prices that come with a crash are generally viewed as favorable to first-time buyers.

Torres is not the first economic expert to raise concerns about the near future of the housing market.

Last week, Stephen Moore, who served as a White House economic adviser during the Trump administration, said a housing market crash is a "big concern" for him.

https://www.newsweek.com/us-facing-perfect-storm-2008-like-housing-crisis-economist-1728011
Click to expand...

There is one big difference:

The 2008 crash was preceded by an insane level of speculation in the housing market.
Not true today.

Oh...and the 2001 crash was also preceded by an insane level of speculation (that time in the stock market, particularly .COM companies). Even Amazon was lucky to survive that one! The biggest thing that saved them is that their website actually provided a service.

In any crash, it is necessary to look at the days BEFORE the actual crash. Those 'roaring good times', so to speak. You will often find the 'roaring good times' are based on a massive speculation scheme, and the crash occurred when the scheme collapsed, like any pyramid scheme.

In other words, the set up to the crash is as important as the crash itself.
 
I am not so sure.....not only are we importing something like 3.5 million people a year but those who come tend to be prolific breeders, and we have not been building much housing in recent years. Supply and Demand is still a thing.
 
Primavera said:
I think you'll see it come 2023.
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In the mid aughts we had people buying homes who had no business doing so. They put basically no money down and got these low interest teaser loans that they were never going to be able to afford when rates increased. Additionally they had basically no equity in their home. That’s what led to so many homes getting foreclosed upon.

That isn’t the case this time around. Stricter lending standards requiring larger down payments putting people in a much better position to handle a slow down. On top of that we had close to a 10% unemployment rate in 2009. Our current unemployment will definitely go up but it’s not going to get close to that level. That’s why we’re not going to see a 25% drop.
 
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