Housing market enters recession territory. Here’s what that means!
If you’ve been paying attention to the U.S. housing market, you’ve likely seen words like “correction” and “recession” crop up more and more.
Earlier this week, National Association of Home Builders CEO Jerry Howard warned on Fox Business’ “Varney & Co.” of a “tough time” ahead for home builders as data continues to show the national housing market slowing down.
And as home builder confidence drops — hitting its lowest reading since May of 2022, according to the NAHB/Wells Fargo Housing Market Index released Monday — Howard said the outlook looks grim.
“For the last seven straight months it has been going down and this is a huge drop — and I think all it says is, ‘Somebody do something or we’re going to go into a recession,’” Howard said on “Varney & Co.”
Then, on Wednesday, Fortune declared the housing market is entering into a “recession,” or is “contracting” as homebuilding cuts back and existing home inventory ticks up as higher mortgage rates strangle demand.
So what does today’s housing “recession” look like? No, we’re not in “Great Recession” territory like after the 2006 housing bubble popped and banks’ risky lending practices collapsed, sending the world economy tumbling.
Rather, in today’s context — after more than two years of what seemed like insatiable housing demand after the COVID-19 pandemic sent the market into a frenzy, especially in the West — “recession” looks a lot more like a “correction,” which could be good news for homebuyers if they’re hoping for price growth to at least level off or even perhaps decline.
Warning: I’m not a financial advisor and these videos are for entertainment purposes only!