The Biggest Reset since 2009 is starting (National Association of Builders Warning)

#finance
#financement

The National Association of Home Builders' chief economist just issued a warning to the housing market: he thinks prices are going to drop on the resale market.

Home builders like Lennar and DR Horton have already cut prices significantly. In total, builders have reduced prices by 16% from their pandemic peak, and they are still dropping.

These price cuts are coming heaviest in markets like Florida, Texas, Tennessee, Arizona, and Colorado.

Meanwhile, data from Zillow and the National Association of Realtors show the prices of existing homes have not dropped at all on a national basis. Sellers with sub-4% mortgages would rather de-list their homes than sell at a loss.

However, I believe that what's happening in the builder market, where the price cuts are now approaching the same level as 2008, could eventually spread to the re-sale market as more existing mortgage holders transition to the 6% rate.