Housing Market Faces Growing Risk Of Multi-Year Collapse As New Home Construction Craters

By Jonathan Ponciano
Forbes Magazine
August 16, 2022
Category: Finance & Economics
Region: United States

New housing starts unexpectedly plunged more than economists projected in July—and to the lowest level in more than a year—as home builders grappled with dwindling demand for new homes, and though some experts remain optimistic that the market could be due for a quick recovery, others are only increasingly bearish. The number of housing starts plunged 9.6% to about 1.4 million last month. …In one bright spot, permits for multi-family units rose 2.8% last month, helping to offset the steep 4.3% drop in the single-family sector. …Fitch Ratings released a note Tuesday morning warning that the likelihood of a severe downturn in U.S. housing has climbed as homes have become increasingly unaffordable for most Americans. The firm predicts only a “moderate pullback” in the housing market. …Pantheon Macro chief economist Ian Shepherdson predicts the downtrend in construction activity will continue to fall until early 2023.

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