Home owners issued dire two-word warning by expert as sales fall through the floor
'I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate,' Moody's Chief Economist Mark Zandi wrote on X this week.
A 'red flare' warning suggests the market is experiencing major instability and a fall is imminent.
It comes as construction of new homes has slowed and sellers are being forced to reduce their prices or pull their homes off the market entirely.
'Home sales are already uber depressed,' Zandi wrote, adding that the housing market could become an issue for the wider economy.
'Housing will thus soon be a full-blown headwind to broader economic growth, adding to the growing list of reasons to be worried about the economy's prospects later this year and early next,' he wrote.
If the housing markets woes do tip into the wider economy it could increase recession fears in the coming months, Zandi warned.
Zandi's biggest concern is persistently high mortgage rates, currently around 7 percent, which are making buying too expensive for many Americans.
High rates have also locked in homeowners who have cheaper deals and cannot afford to move and refinance.
'Home sales, homebuilding, and even house prices are set to slump unless mortgage rates decline materially from their current near 7 percent soon,' Zandi wrote.
Sales of new homes dropped 13.7 percent in May compared to the month before, according to Census Bureau data.
Zandi said further pressure is being piled on the housing market because homebuilders are simply 'giving up' on rate buydowns - providing a lump sum up front to reduce a buyer's mortgage rate and therefore their monthly payments - as they are now 'too expensive.'
The economist also pointed out that many builders are putting off making land purchases for future developments.
'New home sales, starts, and completions will soon fall' as a result, he predicted.
It comes as frustrated home sellers are pulling their homes off the market because they can't get the prices they want.
A softer housing market has seen delistings surge 47 percent across the country in May compared to the same time last year.
Others have been forced to slash their asking prices and accept a more reasonable offer in the current uncertain market.
More than 20 percent of listed homes had price reductions in June, the highest share for the month since 2016.
While the price of homes across the US continues to move up, the rate at which they are climbing has slowed considerably.
May saw price growth at below 2 percent for the first time in over 13 years, according to the report.
'This is a drop compared to earlier this year when home prices were growing at above 3 percent, interest rates were slipping and the forecast for the market was stronger - even while inventory remained low,' Selma Hepp previously told the Daily Mail.
'Now, inventory is climbing, but people are hesitant to buy. Concerns about affordability, economic outlook and elevated mortgage rates are holding buyers back. Similarly, there are now fewer cash buyers in the market indicating that the types of shoppers may be changing.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
12 minutes ago
- Reuters
Japan Q2 GDP probably back to growth, averting technical recession: Reuters poll
TOKYO, Aug 1 (Reuters) - Japan's economy probably grew marginally in April-June due to resilient consumption and net exports, managing to avoid a technical recession, or two straight quarters of contraction, a Reuters poll showed on Friday. Gross domestic product (GDP) in real terms expanded an annualised 0.4% in the second quarter, according to the median forecast of 16 economists, following an annualised 0.2% drop in the first quarter. Without annualisation, the second-quarter growth rate was estimated at 0.1%. Japan's GDP "likely achieved positive growth for the first time in two quarters, supported by resilient domestic demand ... and a slight recovery in external demand," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting. Private consumption, which accounts for more than half Japan's GDP, probably grew 0.1% in April-June, at the same rate as in January-March, despite a prolonged period of high consumer inflation. But capital expenditure growth was seen slowing to 0.5% from the previous quarter's 1.1%. External demand or net exports, which is exports minus imports, probably added 0.2 percentage points to the second-quarter GDP growth, after it shaved 0.8 points in the first quarter. Although Japanese exports decreased year-on-year in May and June, led by falling car shipments to the United States amid President Donald Trump's tariffs, a faster decline in imports was likely to have resulted in a positive net export contribution in April-June quarter, analysts said. On Thursday, the Bank of Japan kept interest rates steady but offered a less gloomy economic outlook after Japan reached a trade deal with the U.S. last week to lower levies on Japanese exports. A majority of analysts expected an additional rate hike by year-end in a Reuters survey last month. The government will release the April-June GDP data on August 15 at 8:50 a.m. (2350 GMT on August 14).
The Guardian
12 minutes ago
- The Guardian
Millennial women were told to chase our dreams. That's left us burnt out, broke and dreaming of a rich patron
A couple of weeks ago, I came across an Amy Poehler joke in which she sums up the different generational experiences of money: 'Boomers are all about money. Gen X is like: 'Is it all about money?' Millennials ask: 'Where is the money?' And gen Z is like: 'What is money?'' It made me laugh – but it also hit a nerve. It felt painfully accurate and oddly comforting. Maybe it's not just me. I'm a millennial, and financial insecurity has been a theme in my life for a while. But recently, it's grown louder, and I literally can't stop asking: 'WHERE IS THE GODDAMN MONEY?' I used to ask nicely. After all, I was raised to be a grateful, polite millennial – the kind who believed that magic always happens outside your comfort zone and therefore did unpaid internships in her 20s and sent thank-you emails after being underpaid. But no more. Hence the capital letters. I'm raging. Maybe it's because I'm approaching 40. Maybe it's because I keep comparing myself with my parents, who by this age had two kids, a car, a house, a garden and three holidays a year. I'm not just raging. After 15 years of working non-stop, I'm exhausted. And there are days when I ask myself: is it really meant to be this way – or am I just failing? Am I simply not grownup enough when it comes to money? I know the answer isn't that simple – or that harsh. Because usually, after days spent examining my shortcomings, I also think: no, this can't just be personal failure. Maybe the odds were never in my favour. Millennial women like myself were told to work hard and follow our passion. Because if you work hard and find something you're good at, it'll pay off. It doesn't, though. The path I've chosen – creative, independent – offers very little in the way of long-term security and when I look around, a pattern emerges. Over dinner recently with three friends – two men and one woman, all about my age – we started talking about money worries. The woman, a talented sculptor, said she had been feeling deeply anxious. She thought it was partly hormones, but more than that, it was existential. She was considering retraining, maybe going into teaching – anything to build a more stable life. At one point, she turned to me and asked: 'How do you do it?' I said: 'I juggle three things at once.' Meanwhile, the two men nodded sympathetically. They work in the arts – but both have full-time jobs and permanent contracts. One just bought a plot of land. The other has tenure. The women are freelancers. The men are secure. Is it our fault? Couldn't we just do what they did? I don't think so. Our economic system doesn't just undervalue women's work. It depends on it. It relies on our flexibility, our unpaid labour, our creative output, our willingness to 'make it work'. It assumes women will absorb the risk, subsidise culture and care with their own time, energy and savings. In creative industries, this is especially stark: women are expected to be grateful to be there at all. To work 'for exposure', for the opportunity – not the paycheque. And that gratitude has kept us quiet, compliant – and broke. This is no accident – it's systemic. In Germany, women across all age groups earn less, save less and live longer. If you're single and self-employed, you're automatically walking a financial tightrope with no net and you'll likely belong to the 70% of working women today who are at risk of poverty in old age. (Recent data from the German Federal Statistical Office reports that the gender gap in retirement income amounts to 29.9%.) I can't believe I'm saying this out loud, but it feels like the only safety net is a rich spouse. When I told my friend a few days ago that I prefer dating artists, she threw up her hands: 'No! You need to find a hedge fund manager!' I thought of that meme – 'I'm looking for a man in finance' – and rolled my eyes. But she wasn't wrong. A wealthy and steady partner is the most reliable pension plan for many women. I don't want a husband, though. What I secretly long for is a patron. The 18th-century kind. Someone who says: 'I believe in your work. Go write. Don't worry about anything.' Or, more realistically: universal basic income. And a proper educational system for the next generation of women. One that teaches them how to handle money, so they don't fall into the same trap. Seriously: can someone explain to me why we didn't learn about compound interest, mortgages, tax brackets and pensions in school? Isn't financial literacy a basic part of education, if the goal is to raise well-equipped adults? Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion I've worked my heart out for more than a decade. I've built a body of work I'm proud of. And yet, I still get nervous opening my banking app. Still avoid deep financial talk. Still don't fully understand the German tax system. I fell for the silly belief that talking about money is obscene. Sometimes I want to slap myself for not having made smarter choices. For not having planned, protected myself by investing or talking to experts. Instead, I kept dreaming about a life filled with interesting encounters, stories, intellectually stimulating conversations. And honestly, there's still a part of me that cherishes that softness. To be a European millennial now – in our late 30s – means witnessing the erosion of the ideals we grew up with, yet still holding on to something tender. Maybe naive. Maybe vital. We were promised a lot and trained for little. And perhaps this vulnerability – this capacity to imagine a different, less materialistic world – is not only a weakness. It might be a strength, of a playful sort. In Istanbul, my current place of residence, people buy gold. I own some gold jewellery – some pieces were gifts, others inherited. I don't like most of them and rarely wear them. But with gold prices soaring, I've been looking at them differently. Gold is finite, after all, which means it keeps its value. Unlike stocks. My plan: take these items to a friend in the Grand Bazaar who deals in gold. There's something almost magical about the idea of turning my few rings and necklaces into gold plaques – a quiet stash I can cash in quickly, to be kept in a velvet pouch that would look like a fairytale treasure chest. A reminder of how much I'm still clinging to a world of fantasy. And maybe that's the whole trick. Keep going. Keep improvising. Because our boomer parents told us to follow our passion. And now? We're melting down our jewellery. Carolin Würfel is a writer, screenwriter and journalist who lives in Berlin and Istanbul. She is the author of Three Women Dreamed of Socialism
Reuters
12 minutes ago
- Reuters
Indian equity benchmarks slip at open as US unleashes fresh tariffs
Aug 1 (Reuters) - Indian benchmarks opened marginally lower on Friday after the United States slapped dozens of trading partners with steep tariffs and reiterated 25% duty on imports from India. The Nifty 50 (.NSEI), opens new tab fell 0.14% to 24,734.9 points and the BSE Sensex (.BSESN), opens new tab lost 0.14% to 81,074.41 as of 9:15 a.m. IST. Twelve of the 16 major sectors declined at the open while the broader smallcaps (.NIFSMCP100), opens new tab and midcaps (.NIFMDCP100), opens new tab traded flat. The benchmark Nifty and Sensex (.BSESN), opens new tab fell as much as 0.9% on Thursday, but pared some losses to end 0.4% lower as investors viewed the United States' 25% tariff on India as a pressure tactic and hoped for lower rates once negotiations conclude. The negotiations between the two countries are continuing, U.S. President Donald Trump said on Wednesday, after announcing tariffs on India. U.S. increased tariffs to 35% from 25% on Canada, a top trading partner, and set duties at 20% for Taiwan and 19% for Thailand. ($1 = 87.5700 Indian rupees)
