Housing and rates are worrying some economists that a recession is looming.
By David Goldman | CNN Money
“One of the biggest concerns is the housing market,” said Lindsey Piegza, chief economist for Stifel, on CNNMoney’s “Markets Now” live show Wednesday. “It’s throwing up a very large red flag and suggests maybe this 4% growth we saw in the second quarter is not sustainable.”
Home sales have declined in four of the past five months as housing prices have grown — but paychecks have remained stagnant. Many people can’t afford to buy homes, and those who can are taking on a lot of debt to get into them.
Piegza says that echoes what happened right before the Great Recession in 2008.
“We’re not there yet, but this is what led us to the housing crash,” she said.
While a recession may be in the cards in ’19 or ‘20, Arizona housing markets have a healthy, positive momentum not experienced here since the mid-2000s. Sales have continued to climb; this year, sales have hit highs not reached in the same month in any previous year since 2007. Price appreciation is a reality and is likely to strengthen because demand simply outstrips supply. Wage growth is heating up, with sub-4% unemployment. I see only positives for Arizona homebuilders- until we see more significant mortgage interest rate increases.
