In this article it talks about housing forecasts additionally lower prices and less construction. The article talks about how home prices will on average decline within the next year. Though different parts of the country will naturally experience this with slight change. Aggregately housing prices for both homeowners and tenants will decline. Homeowners should acknowledge that on average throughout these past three years there has been a 45% appreciation for their prices. For owned property higher mortgage rates resulted in recent 6.70% mortgage rate pushes monthly payments 54% higher than the 2021 average mortgage rate of 2.96% on the same loan amount. For apartments rising rents exceed other consumer prices, on average, and wage rates are not keeping up. On the positive side, employment has increased, helping those who were jobless a year ago. Basically for home. The outlook for housing demand is pretty dismal, but from a very high starting point. On the owned property side, the high prices and high mortgage rates have combined to make purchases by first-time buyers much more expensive than in the last two years. I have seen many examples of this in the last couple years. On the rental side, the only good news is that fewer families will move out of apartments into single family homes. However higher rent means people will need extra roomates. It is agreed by real estate advocates that we have been underbuilding in past years mostly from 2007-2020. For both single family homes and apartments, quantity demanded will drop and prices will come down. The magnitude depends on local characteristics of population growth and new construction. Good news for homes for single family homes is that depreciation has given back the great gains of recent years. Also The coming housing downturn will not end up as badly as the 2008-09 recession for two reasons. First, mortgage lending in recent years has been far more stringent than in the early 2000s. In the future Real estate agents will find fewer people looking to move. So many mortgages were refinanced down to three percent that few people will abandon those cheap interest rates to buy a new house at a much higher rate. And developers and contractors will suffer in the two coming years because of construction waning. Lastly Expansive monetary and fiscal policy has overstimulated the housing sector and currently tighter monetary policy is pulling it back .
A chapter in the economics book which connects with the article is chapter 2 Cycles in your sector of the economy. Specifically p. 25-26 where it talks about housing and specifically mentions topics pertaining to new housing construction. An example Construction of new housing varies far more widely than does the overall economy, making it one of the most volatile sectors of the economy. This relates to the article in general but especially with the joking part where it says that roller coasters fit better in amusement parts than in neighborhoods. These crazy changes can very much affect people’s lives either good or bad. Another aspect which the book talks about is where families will live in declines in shortages of housing or booms and if young adults will live with their parents or on their own. Even if well off families can afford to buy a summer home now. The portion about where a family can live relates more with the article and where young adults are going to live both relates with topics in the article and just a major feature in our modern life.