The Expert Podcast

Is the party over for home construction for new house . Building contracts . Well according to a survey of sentiment of large builders . It's scary times according to some builders and they're slashing production and slowing construction , because they feel that the future is not going to be there for buyers . broad slowdown is the way it's called . What are you seeing in your market Are you a builder ? Are you a . supplier to a builder Are you seeing this slowdown ? Again this is a sentiment Survey not necessarily a . Financial Management survey . So the financial side of it says that there's a fact data says 31% of home A reduction in new home sales , cancellation rates jumped in June . So if you're a builder and you see people canceling contracts , you're going to be scared . But is this temporary ? Is this a permanent pullback ? It's not that people are looking to dump homes and sell houses like they did in the financial crisis . It's just that some buyers are starting to go on Pause . And say look I don't know if I want to jump in at these prices . Look at these cancellation rates from year over year . The red is 21 The blue is 22 They're all . Off the charts . For cancellations of contracts . So if you're a builder you might be panicking In fact a quarter of home builders are reducing . prices . And a couple of reasons why these contracts are being canceled Mortgage rates are high , and that some people think that prices of homes is too high which may be it is the problem though is if you're a home buyer , Or you're somebody who wants to buy a home , you have to have a place to live . If you're renting you have to buy somewhere . Are there going to be deals remains to be seen This is kind of a shakeout period . The next few months between now and the end of the big buying . season is going to really determine what happens over the next year . Are the people who want to buy a house are going to be resigned and surrender to the fact that they just need to keep renting Are we kind of become a nation of renters because home values have become excessive Are more people going to , even rent single family homes not just apartments because the price is too high . And is that going to create . A problem for the financial future . look many people are able to retire because they bought a house 20 30 years ago and they paid it off and they have no mortgage . Then you can retire . If you still have a rent of two or three or $4,000 , you have to be on the treadmill chasing . That rent every month . And if your rent is $3,200 right now what's it going to be in 20 years ? Right . So buying a house might seem expensive , but are there enough people that are willing to jump in At the current rate . Of mortgage interest and the current rate of sales price . To keep this house . Market going and if they don't . What does that mean for the future ? There are still more households being formed more people that need a place to live every single month . So if there's not new homes being produced , Where these people kind of live . There's apartment complex is being produced but not single family homes . So is there going to be a higher percentage of people renting in five or 10 years ? And what does that mean for the financial future People who have nothing to fall back on ? And have a permanent monthly expense . That never goes away because you , you pay off a mortgage in 20 or 30 years you don't pay off rent rent last forever It's permanent .