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Housing Market Hints At The Next Recession

October 14, 2019

The 2020 election could also come with a new recession, according to a recent report that revealed there are clear signs in the housing market including a gap between homes prices and income. 

 

"In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring in several major markets, the post said, linking to a story on New York home prices in 'near free-fall' from earlier this month," according to HousingWire

 

"Household income has been growing, but it hasn’t come close to keeping up with the increase in home prices. For example, the median annual household income in August rose 1.3% from a year earlier, Sentier Research said earlier this month. That compares with the 4.7% gain in the U.S. median home price in August from a year earlier, using data from the National Association of Realtors."

 

With income struggling, home values will depreciate. In turn, the report says that consumers may cut spending as the value of their assets decreases. 

 

"A slowdown in consumer spending, which accounts for about 70% of GDP, points to an economic contraction," according to HW.

 

To learn more about a possible recession that's on the way, click on the image above

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