Cold House
Every sector has an impact on the performance of the economy, but some sectors are simply larger than others, which means they’ll have a bigger impact. For example, the energy sector collapsing would have a much greater impact than the utility sector. One of the most vital sectors to the economy is the housing market, with it being responsible for more than 10 percent of the US GDP, and this was defined with the 08’ recession, which was a result of the housing bubble being popped. The housing market has seen a major recovery since, especially in 2021 during the pandemic, where it essentially skyrocketed due to the circumstances.
The fuel for that explosion seems to be running out now as the August housing data gave us a lot of new information. US existing-home sales dropped by 2 percent, but it’s still higher than the pre-pandemic levels. According to real estate agents, the competition for houses has been so high that some buyers are simply dropping out of the market after multiple missed offers, which explains the decrease. The median home price increased by 14.9 percent, which was a slowdown too, and it explains the decrease in homes available for sale. One interesting statistic was the amount of houses that were bought with cash, which was 22 percent, and the reason why this occurred was because people were trying to outbid each other at houses with low price points. The market is still competitive, but it looks to be reverting to the mean. What do you think about this housing data?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
