By CNBC, Diana Olick
Expecting a boost because of the lowering mortgage rates, but it’s going otherwise.
Expecting a boost because of the lowering mortgage rates, but it’s going otherwise.
Big part of the slow home sales is because of affordability. Rise in cost of owning a home is the biggest hurdle for new home buyers.
New homes are costing more due to the increase cost of land, materials have been greatly affected by tariff and shortage of labor.
The lack of highly skilled workers in the construction industry forced the labor market to get expensive.
After the market crash of 2008, just a small part of the labor force came back to the industry.
Cost of Building
Home building materials has been hit with high cost as well, this is in congruent with the trade war and expected tariffs that will be enforced on raw materials coming from overseas.
Even with low inventory, the expected turn out of bidding wars has come up short. The main reason would be affordability.
Even with the more relaxed mortgage lending standards and the number of loan programs. Application for mortgages are slowing down.
The summer is usually where sales pickup, in comparison to last year’s uptick in the summer.
We saw an increase in home buyers going back to looking at homes but the affordability issue still is the main reason for not buying new homes.
Lenders foresee shirking of inventory until the fourth quarter due to the underlying factors of the housing market. But without addressing the affordability issue could exacerbate the situation and might trend to the first quarter of 2020.
Read more about it: https://www.cnbc.com/video/2019/07/24/tesla-misses-revenue-estimates-reports-loss-of-1point12-per-share-vs-0point40-expected.html
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