Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Housing Market on Shaky Ground (Video)

  by    0   0

While few are as blunt as Peter Schiff in warning of another bubble in real estate, mainstream analysts are starting to worry that the US housing market isn’t as strong as many believe. Peter warns that rising home prices are a product of extremely low interest rates suppressed by the Federal Reserve. Robert Shiller, Nobel Laureate economist, seems to agree in a recent interview on CNBC:

There’s also the worry that the very low interest rates that we’ve had, with the 10-year just above 2%. That has also been driving this [housing] market. That is fragile… I’m not calling a turning point yet, but I feel a little bit of anxiety about the market.”

Shiller plays it cool, but admits that he thinks the market is looking like a bubble in San Francisco and possibly Miami:

The two best cities on this 12-month basis are Miami and San Francisco. There’s a pattern here I think. It is glamor cities. Beautiful places that have been the most bubbly in the past. I don’t know exactly what accounts for these big price increases in those cities, but I suspect it has something to do with their history of speculative bias. I don’t think of it as a good sign. It’s getting a little too bubbly in San Francisco…

The Wall Street Journal is also reporting on a slow-down in the housing market. In an article published yesterday, John Carney writes, “The US housing market has gone wobbly.” He continues:

Sales of new homes in November were down 1.6% from a year ago, according to Commerce Department data last week. Existing-home sales for that month were down 6.1%. The monthly survey of U.S. home builders from housing-research firm John Burns Real Estate Consulting Inc. found the per-community sales pace shrank by an average of 20% in November, year over year.

“This slowdown may not be fully evident in the Case-Shiller/S&P Home Price Index figures due Tuesday. Those have a three-month lag; the newest report will reflect home-price changes in October. Even so, the trend hasn’t been promising. September’s report showed annual home-price growth in the 20-city index slowing 0.7 percentage points to 4.9%. That was the index’s first reading below 5% since 2012.”

As Peter has been pointing out for months, we’re starting to see the same cognitive dissonance in the media that was present in 2006 and 2007 just before the financial crisis. The United States is supposedly in the midst of an economic recovery that will allow the Fed to raise interest rates in the coming months. But this narrative ignores a key question. If the housing market is looking “wobbly” with these extremely low interest rates, what do upbeat forecasters think will happen to real estate when rates go up?

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Gold Hits New All-Time Record High

Gold hit a new all-time nominal high, surpassing the previous record set in December of the previous year. The precious metal’s price reached approximately $2,140, indicating a robust and continuing interest in gold as a safe-haven asset, despite a rather peculiar lack of fanfare from the media and retail investors. This latest peak in gold […]

READ MORE →

Is a Weak Yen Feeding the Global Gold Bull?

The gold price has been surging, with unprecedented central bank demand gobbling up supply. It has been a force to behold — especially as US monetary policy has been relatively tight since 2022, and 10-year Treasury yields have rocketed up, which generally puts firm downward pressure on gold against USD. 

READ MORE →

World Gold Council: “Blistering Central Bank Buying” Fuels Strong Gold Demand

Total gold demand hit an all-time high in 2023, according to a recent report released by the World Gold Council. Last week, the World Gold Council (WGC) released its Gold Demand Trends report, which tracks developments in the demand for and use of gold around the world. Excluding over-the-counter (OTC) trade, 2023 gold demand fell slightly from 2022 […]

READ MORE →

VIX – The Calm Before the Storm

The VIX, often referred to as ‘Wall Street’s fear gauge,‘ is currently portraying a sense of calm among investors, registering well below the 20 level. 

READ MORE →

Four States Consider Lifting Taxes on Precious Metals

Citizens of Georgia, Kentucky, Wisconsin, and Kansas may soon enjoy lower taxes on precious metals if recently introduced pro-metal bills are made law in 2024.

READ MORE →

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Call Now