The death of the new home market: First time buyers, reaching the edge of affordability, and investor disruption.

Dr. Housing Bubble reports:

Given every headline we have seen over the last few years you would think that home builders would be out in droves adding new supply to the market. What building is occurring is focused on multi-family units to cater to the trend of rental Armageddon. The new home market does well when the economy is recovering evenly and wages are moving up across the board. New home sales come with a heftier sticker price and most investors are interested in deals, not marked up new homes. But prices are pushing up in most metro areas and rents are steadily moving up. Yet this push is more of a constraint of investor demand for existing homes and not regular families competing with one another as was the case for a few generations. That is why the homeownership rate of today is what it was back in 1984, over 30 years ago. It is also the reason why new home sales are pathetically low. The new home sale market is really the place to look at for a true housing recovery for the masses and nothing is really happening there.

Thank you Federal Reserve!