3 ms·
Not really. Lower values, essentially reduce the incentive for builders for build new housing. This was a big reason why post 2008 building rates were so low.
by umeshunni 4y ago
Not really. Lower values, essentially reduce the incentive for builders for build new housing. This was a big reason why post 2008 building rates were so low.
- mywittyname 4y agoRight. Part of the inflation in housing is driven by core inflation in housing inputs: materials, labor, etc. In most of the US market (outside of Cali), housing costs roughly track building prices. Some of this has cooled, hence the market cooled off. But fundamentally, we are very far from a "housing crash" because the market is far from saturated with inventory like it was 2008. Oft forgotten fact of 2006 is that people were buying multiple new builds in their subdivision for speculative purposes. Because they thought they could flip them in six months for a 30-40% profit. To have a crash, someone needs to buy at inflated prices and lose their asses.