A new generation of buyers is jumping into the market at what may be the worst possible time.
Millennials Face Yet Another Rug-Pull
As we all know, millennials are America’s most economically cursed generation. Now that they’re hitting their 30s and 40s, they’re not even cool anymore. And the housing market might be about to stick it to them once again.
As we recently wrote, millennials are finally buying houses after years of being sidelined by such catastrophes as the dot-com bust, Sept. 11, two long wars, the financial crisis and its jobless recovery, a pandemic, and the endless musical career of Chris Brown. In its foolish haste to analyze, this newsletter suggested this could be a way for millennials to wreak a bit of economic vengeance on the world by helping push home prices even further past the moon.
But what if it’s actually just another trap for the broke generation? Americans think this is the worst time ever to buy a house, according to a recent poll. Gary Shilling has many, many charts and numbers validating that sentiment. Interest rates are rising, and housing affordability is approaching rock-bottom.
Out of Reach
Affordability is dropping as housing prices and mortgage rates rise
One silver lining is that home builders are starting to ramp up supply. Oops, it turns out that the silver lining is actually a sharpened katana dropping on the neck of anybody buying a house right now, with all this new supply hitting just as soaring costs crush demand. That’s not to mention the rising odds of a Fed-induced recession, which would be the third one of those since the millennium began.
Oh, and if you buy a house in the ’burbs, you’ll need a car, unfortunately. Best of luck ever getting a bargain on one of those again. Conor Sen points out that, even when the supply constraints that have boosted car prices ease, automakers will do everything they can to make the new higher prices stick, to help cover the expenses of the switch to electric vehicles. Continue Reading on the early signs of foreclosures at Bloomberg News.