Do you remember what happened precisely 14 years ago? In 2008, the housing market collapsed and the subprime mortgage meltdown made national headlines day after day as unprecedented panic swept through Wall Street. To many of those that were working in the financial industry at that time, it seemed like the world was ending. Of course the world was not actually ending, but without a doubt it was an extremely painful episode for our nation. Countless Americans lost jobs or homes (or both), and the ripple effects of that crisis can still be felt today.
But did you know that there was another housing crash exactly 14 years before the one that we witnessed in 2008?
In 1994, surging mortgage rates caused new home sales to plunge dramatically…
The average 30-year fixed mortgage rate increased by around 2 percentage points in 1994, ending the year north of 9%. New home sales slumped. In December 1993, the seasonally adjusted annual rate of new single-family-home sales was 812,000. A year later, in December 1994, it had fallen over 20% to 629,000.
That kind of sounds like what we are experiencing right now.
And if you go back 14 years before that, you will find another housing crash.
The U.S. housing market was booming in 1978 under Jimmy Carter, but higher interest rates caused things to cool off in 1979, and then in 1980 home sales really began to tumble. Ultimately, the level of existing home sales tumbled by about 50 percent over a four year period…
From the peak of 4 million existing-home sales in 1978, there was -50% drop in home sales over the next four years, so that by 1982 only 2 million homes were sold (data here, Table 7). It took almost two decades, or until 1996, before home sales exceeded the 1978 level of 4 million units.
The Federal Reserve knows what has happened in the past when they have aggressively hiked rates.
But they are doing it again anyway.
So here we are 14 years after the last housing crash, and it is starting to happen again. We just learned that sales of new single-family homes were about 30 percent lower this July than they were last July…
The plunge in home sales is just stunning. Sales of new single-family houses collapsed by 12.6% in July from the already beaten-down levels in June, and by nearly 30% from July last year, to a seasonally adjusted annual rate of 511,000 houses, the lowest since January 2016, and well below the lockdown lows, according to data from the Census Bureau today.
Those numbers are absolutely horrible, and every region of the country is getting monkey-hammered…
- Northeast: -37%
- West: -50%
- Midwest: -23%
- South: -21%
Sales of new single-family homes have now dropped for six of the last seven months.
That is clearly a trend.
Of course sales of previously owned homes have been falling quite rapidly as well…
Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors.
The sales count declined to a seasonally adjusted annualized rate of 4.81 million units, the group added. It is the slowest sales pace since November 2015, with the exception of a brief plunge at the beginning of the Covid pandemic.
Sales dropped about 20% from the same month a year ago.
They are calling this a “housing recession”, but that isn’t what we are actually facing.
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The truth is that we are in the early stages of another full-blown housing crash.
Just like we experienced in 2008. Just like we experienced in 1994. Just like we experienced in 1980.
Things are particularly bad in the markets that were once the hottest.
For example, just check out what has been going on in Boise, Idaho…
Nearly 70% of home sellers in Boise, Idaho cut the asking price on their house in July, Redfin reports; a remarkable turn for the once-hot real estate market.
Nationally, 32 percent of all home sellers cut their asking price last month.
Needless to say, prices are still way too high and they are likely to come down a lot more in the months ahead.
If you bought a house near the peak of the market, I really feel sorry for you.
Lots of people locked in mortgages at vastly elevated prices.
And now a lot of those same people are deeply regretting those decisions…
As the U.S. housing market cools, feverish competition for homes in the past couple of years has left 72% having regrets about their home purchases, according to a recent survey from Clever Real Estate.
The number-one reason for the buyer’s remorse: 30% of respondents said they spent too much money.
The exact same thing happened last time around too.
We never seem to learn from our mistakes, and now the stage is set for what could be the biggest housing crash of them all. We shall see what the Federal Reserve chooses to do.
If they stop raising rates, that will help. But if they decide to keep aggressively hiking rates, that will be absolutely catastrophic for the housing industry.
I have been warning that this sort of thing was coming for a long time, and now it is here. If you are looking to sell a home, try to do it as quickly as you can.
Because prices are going to continue to fall all over the nation, and it won’t be too long before vast numbers of homeowners are underwater on their mortgages.
***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***
About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com. In addition to my new book I have written five other books that are available on Amazon.com including “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.
I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.
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Article cross-posted from The Economic Collapse Blog.
Controlling Protein Is One of the Globalists’ Primary Goals
Between the globalists, corporate interests, and our own government, the food supply is being targeted from multiple angles. It isn’t just silly regulations and misguided subsidies driving natural foods away. Bird flu, sabotaged food processing plants, mysterious deaths of entire cattle herds, arson attacks, and an incessant push to make climate change the primary consideration for all things are combining for a perfect storm to exacerbate the ongoing food crisis.
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