It's a Housing Slump, Not a Crisis

I’m in the process of building a house, so I recently met with the head of a real estate brokerage to discuss selling my current home in about a year. Knowing that I worked in finance, he asked me my views on the housing market because he said he was seeing lot of doom and gloom on the internet.

First, all real estate is local. The housing market where I live in coastal South Carolina is still strong. Although transactions are down from a year ago, that’s because there are very few houses on the market. A lot of people – many of them cash flush and not impacted by rising interest rates -- are moving here from other parts of the country, and I wouldn’t have any trouble selling my house today if I wanted. He agreed.

He also agreed when I told him that you can’t randomly scroll on Twitter these days without running into predictions of an impending housing collapse. Jeff Weniger, the head of equities at WisdomTree investments, recently posted a thread on Twitter labeled “Housing is in trouble” that went a bit viral. The thread was well-researched with charts and data to back up each of his points, such as how the supply of new homes has skyrocketed, as have monthly principal and interest payments on mortgages. Correspondingly, the National Association of Home Builders’ Housing Market Index has tanked. New and existing home sales have dropped precipitously, and affordability has tumbled to 2005 levels.