the home at the price they paid for it, they are going to learn that they must greatly reduce the price in order to sell it. Since new homes will be almost impossible to sell at what they cost to build, builders will stop building new homes. And, of course, the demand for building materials will decrease rapidly. Therefore, we predict the price of building materials will also come down. And, unfortunately, hundreds of thousands of workers in the construction industry are going to be laid off. The next six months will not be a good time to buy a new home. I would wait several months until home prices and building costs come down. And I think they will come down rapidly over the next six months. There may be a few localities that are an exception, but overall, housing prices and building materials are going to come down.
purchase only a $290,000 home. A $290,000 home is a far cry from a $440,000 home! To sell a home in today’s market, the seller will have to greatly reduce the price so that buyers can afford it. At first, homeowners are going to be reluctant to do that. But their homes won’t sell until they do. So the number of homes on the market will begin to grow rapidly. As homeowners learn that they can no longer sell
they’re going to go right back up. As long as the government prevents oil companies from drilling for oil, gas prices will continue to stay high.
What about the price of homes?
Home prices are another story altogether. While prices of consumer goods and hard goods will continue to remain high, housing prices are going to come tumbling down thanks to high interest rates. An $80,000 annual household income qualifies a potential homeowner for a house payment of $2,300 per month. When interest rates were 2.5%, $2,300 per month would purchase a $440,000 home. But with interest rates at 6.7%, $2,300 per month will
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