Housing will have a second downfall. Once the inventory glut of current non-sold homes is liquidated (about 24 months average), the inflation factor will in the mean time have driven building costs through the roof. So here is the scenario. Lenders will remain leery of loose lending practices and actually have the audacity of requiring a down payment. How ridiculous, the next thing will be requiring proof that the borrower can actually pay them back.
In the mean time our built-in inflation will drive everyday living costs well beyond what we are experiencing today, making saving nearly impossible for the average person. Wages will not rise accordingly. Real purchasing power will continue to decline as an excess labor pool vies for fewer good paying jobs.
Government (seeking re-election to avoid gainful employment) rather than embracing the real issues, will continue to attempt to turn the tides by using bales of tax money to build weak levies against the inevitable rising costs that are built into our economic system of exponential growth. Residential housing in the mean time will become more and more unaffordable to the point that the average American will not have the means to purchase a home.
So there you have my predictions for residential housing over the distant future. If you haven’t done so, read the free chapter of my book by clicking the “book” button at the top of my home page. Keep in mind that the housing problem had not occurred when I wrote the book.
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