The US housing market has been one of the hottest markets across all industries for the past few years. This, however, is slowly changing as experts believe the market is starting to cool down.
There are several factors that experts consider as signs of a slowing down market.
The summer of 2018 was anticipated to be the country’s most competitive time for the housing market in recorded history. However, this didn’t really happen.
The month of June has shown a substantial drop in new home sales and this has snowballed in the following months. From a drop of 5.3%, it is now at an all-time high of 8%. For the third consecutive month, the issuance of residential building permits continues to decline.
The weakening of the demand for these housing units is an apparent sign that the market is finally cooling off.
The National Association of Homebuilders consider 1.3 million units as the normal level of housing starts but the industry is about 30% fewer in single-family homes.
Although the unemployment rate across the country has gone down, this doesn’t translate to American’s being able to afford their houses. Factors like the rising interest rates, mortgage rates, and the increasing tariffs of raw building materials are among a myriad of factors affecting the cost of construction.