Housing Market Enters Recession

The housing market which began to climb upward in 2011 appears to have officially turned over and experts are now calling it a housing recession.

According to Fortune, homebuilders built 982,000 single-family homes in June and that is a 19% decrease since February and 16% down from the same month last year.

Homebuilders are slowing down and when looking at history this is typically what happens when the housing market cycle turns over. Existing homes for sale are currently in excess as a result home builders are cutting back in production.

Head of research at John Burns Real Estate Consulting Rick Palacios Jr. explained, “Peak euphoria is behind us. We are giving back some of the euphoria [home] pricing that was rolling over every housing market.”

“Builders are already [deciding] to not pour slabs in certain markets. Which is the technical trigger for a start for a home. In certain markets it will feel like [a housing bust],” Palacios added.

In June Fed Chair Jerome Powell said, “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”