Is US real estate market heading for a crash – The Portugal News

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Recent data revealed a sudden increase in the number of new homes for sale, due to home builders selling off their inventory, which raised concerns about a possible crash in the housing market.

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In November 2023, around 590,000 new homes were sold, a 12.2 percent decrease in sales compared to October. The price of these homes fell to $434,000, which is 12.5 percent less than the price of the previous year.

At the end of November, 451,000 new homes were put up for sale, enough to meet the demand for approximately 9.2 months, which signals huge problems developing in the residential real estate market.

Home builders suddenly started selling more houses than before, an unexpected occurrence, which could be a sign that they are worried about the market. In previous years, home builders would keep some houses to control prices, however, they have began liquidating the properties quickly, and that raises concerns.

In the past, whenever there has been lots of new homes in the market, it often coincided with significant economic troubles. This history lesson allows us to conclude that we might be in for a tough time in the housing market.

The large quantity of housing available in the market compared to the people who are looking to buy a home, has caused the price of new homes to drop, especially in places like California. In other areas, prices have dropped by 15 percent or more.

Mortgage rates

Currently, mortgage rates are at 6.5 percent, which is not too high, however, it’s not too low either. New mortgage applications are at record lows not seen in decades, which means home sellers will begin dropping prices like never before. The decrease in housing prices will occur slowly at first, then suddenly sellers capitulate and become desperate to sell their homes.

If you’re thinking about buying or selling a home, this situation could impact you. Prices might continue to drop, which will make it harder to sell a house, however, if you’re looking to purchase a property, it could be a good time to find a more affordable option.

Real estate market

The real estate market is going through some big changes, and it’s essential to be aware of them. If you’re planning to make a move in the real estate world, keep an eye on the news and any updates about the housing market in your area, understanding these changes can help you make better decisions.

On a national level, active listings reached a three-year high at 752,000 homes in November 2023. New single-family home sales in November were at a seasonally adjusted annual rate of 590,000.

In accordance with the U.S Census Bureau’s November 2023 Data, the median sales price for the 590,00 new homes sold was $434,000. The number of new houses for sale at the end of November was 451,000, indicating around 9.2 months’ supply.

In California, statewide, a spike in new homes hit the market in November.

The prices for properties in various counties, including San Francisco, San Mateo, Alameda, Butte and Contra Costa, experienced significant drops, contributing to six of the largest price drops in the state. The entire state of California has a lack of active listings, adding to the broader issue of an active listing shortage nationwide.

Active listings in Texas surpassed 2019 levels, with Austin recording 5,800 active listings as of the end of November. Williamson County, Texas, registered a price drop in housing of 16 percent, which could place the county in crash territory of the housing market.

Other counties at risk of the housing market crashing are New York County, New York, which noted the largest price drop at 22 percent, and Cambria County, Pennsylvania, which witnessed a price drop of 14 percent.

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