The 3 Warning Signs that Indicate an Impending Housing Bubble!
08/18/21 • 27 min
In this episode of the TruPodcast, we’re going to explore the 3 warning signs that will tell you if a housing bubble is about to burst.
It’s no secret that we’re in a time where the housing market is booming, but don’t get too excited because there are some very telling signs that say our party might be coming to an end soon. So before you invest your hard-earned money in your next investment property or buy a home, make sure you listen to this episode so you can avoid making costly mistakes later on.
There are signs of an impending housing bubble, but we are not talking about some data points that could tell us whether or not the housing market will crash.
Prices are above the housing bubble levels of 2006.
Prices have set several record highs in 2021, while the housing supply was ill-prepared for the increased demand due to the pandemic. Additionally, the housing market has been experiencing FOMO, which has driven the prices of the housing market to a point where a substantial portion of potential homebuyers cannot afford to buy.
https://www.businessinsider.com/us-housing-bubble-home-price-inflation-rent-costs-market-2021-8
More Small Houses are Hitting the Market. Will These Houses Slow the Impending Housing Bubble?
The share of small houses that were for sale in July 2021 increased. But will these houses make it more affordable for homebuyers going forward? A small house as defined by Realtor.com is between 750 and 1,750 square feet. The average median for these types of houses in July 2021 was $385,000.
https://www.businessinsider.com/small-house-listings-increasing-amid-improving-housing-market-2021-8
The “F” Word that Could Cause an Impending Housing Bubble
For the first week of August, homeowners that are in forbearance came in at 1.6 million. Overall, that is a reduction from 3.40% to 3.26%. This segment of homeowners is in jeopardy of losing their homes. You might be saying this sounds like our last housing bubble, but this time it is different. There are more homeowners that are using forbearance as a financial tool, but unfortunately, forbearance is not a tool that you should use for a long period of time.
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In this episode of the TruPodcast, we’re going to explore the 3 warning signs that will tell you if a housing bubble is about to burst.
It’s no secret that we’re in a time where the housing market is booming, but don’t get too excited because there are some very telling signs that say our party might be coming to an end soon. So before you invest your hard-earned money in your next investment property or buy a home, make sure you listen to this episode so you can avoid making costly mistakes later on.
There are signs of an impending housing bubble, but we are not talking about some data points that could tell us whether or not the housing market will crash.
Prices are above the housing bubble levels of 2006.
Prices have set several record highs in 2021, while the housing supply was ill-prepared for the increased demand due to the pandemic. Additionally, the housing market has been experiencing FOMO, which has driven the prices of the housing market to a point where a substantial portion of potential homebuyers cannot afford to buy.
https://www.businessinsider.com/us-housing-bubble-home-price-inflation-rent-costs-market-2021-8
More Small Houses are Hitting the Market. Will These Houses Slow the Impending Housing Bubble?
The share of small houses that were for sale in July 2021 increased. But will these houses make it more affordable for homebuyers going forward? A small house as defined by Realtor.com is between 750 and 1,750 square feet. The average median for these types of houses in July 2021 was $385,000.
https://www.businessinsider.com/small-house-listings-increasing-amid-improving-housing-market-2021-8
The “F” Word that Could Cause an Impending Housing Bubble
For the first week of August, homeowners that are in forbearance came in at 1.6 million. Overall, that is a reduction from 3.40% to 3.26%. This segment of homeowners is in jeopardy of losing their homes. You might be saying this sounds like our last housing bubble, but this time it is different. There are more homeowners that are using forbearance as a financial tool, but unfortunately, forbearance is not a tool that you should use for a long period of time.
Thanks for Listening! Follow us on Tik Tok Facebook and Instagram
Previous Episode
Success isn’t all about the money! Two Skills You MUST Have to Succeed!
How Successful Will These Young Adults Really Be in Life?
We often think that if we want success, we need to have a lot of money in the bank account or be born into it. The truth is that you should possess two skills: reading and math. These two skills are the foundation of every profession and any job position that requires attention to detail. Without them, you cannot succeed in life! In the latest episode of TruPodcast, we discuss how a State passed a law that will not require a high school graduate to be proficient in their reading and math skills. How do you think that will impact these young adults in the future?
Also, we’ll talk about the housing market, your money, and how debt is growing at alarming rates in some States.
Show Links:
https://www.cnbc.com/2021/08/10/3point4-million-americans-are-still-long-term-unemployed.html
https://www.cnbc.com/2021/08/11/cpi-report-july-2021.html
https://www.cnbc.com/2021/08/10/us-states-with-the-most-credit-card-debt.html
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Next Episode
3 Housing Market News Items: It’s Bad, But It Ain’t Necessarily All Bad
Housing Market News
You know that the economy isn’t doing well. I mean, come on!
We’re all feeling it in our pocketbooks. And it’s not just about your bank account either: there are a lot of people out of work and losing their homes because they can’t make ends meet. But don’t worry – even though things seem bleak right now, there’s still plenty to be optimistic about! Watch this video for five reasons why the economy might NOT be as bad as you think.
Pending Homes Sales Drop in June
-The number of signed contracts on existing homes fell in June.
-The latest data from S&P Case-Shiller shows that prices in May were 17% higher than they were a year ago.
-Mortgage rates shot upward in June, further adding to the affordability issue.
-Newly built houses, which closed in June were down 6.6% from May, and 19.4% from June 2020
https://www.cnbc.com/2021/07/29/pending-home-sales-drop-in-june-.html
Inflation Gauge up 3.5%
–An inflation gauge followed closely by the Federal Reserve increased 3.5% year over year in June, below the expected 3.6%.
-Consumer spending increased by 1% as personal income also rose faster than expected.
-When it comes to employment, the rate of inflation increased.
Record Lumber Prices Deliver HUGE Profits
-Lumber futures closed at $621.90(As of July 30th)
-At the peak lumber was going for $1,711.20 per 1,000 board feet, which was adding about $20,000 in building costs to a $200,000 house
-Mill executives say lumber prices could rise again due to the wildfires in British Columbia
If this housing market news has you worried about a possible housing bubble, you’re not alone. Housing prices are on the rise again and many Americans are unlikely to be able to afford homes if this trend keeps up. Lumber futures rose sharply earlier in the year due to COVID-19, which really hurt the supply chain with lumber mills.
Housing Supply is tight, and demand has been outpacing supply in many markets. Housing starts have been down for the past 4 months, and they have not kept pace with the growing demand for houses. Housing starts are an important measure of the demand for housing and if they don’t keep up with the growing demand then we could be at risk for a Housing Bubble Burst.
To make matters worse, as housing prices increase more homebuyers are turning to adjustable-rate mortgages, which could result in a Housing Bubble Burst if interest rates are raised and people can’t afford their monthly payments.
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