The United States has been on the verge of a housing crisis for years, and while a few bubbles were popping at the height of the last bubble, they’ve been steadily declining.
Now, it appears that the bubble that burst during the financial crisis may be coming to an end.
The Federal Reserve, which had previously been expected to pump up homebuilding and rental prices, appears to be signaling that it wants to get out of the way as the market continues to implode.
“We’ve been looking for some time for a new and sustained level of supply, and this may be the year we finally find it,” Federal Reserve Chairman Jerome Powell said during a recent speech.
Housing prices are currently up about 2 percent annually, and the pace of home price growth has slowed.
The current economic outlook is not encouraging for many homeowners, according to a new survey from Bankrate.com.
The national median home price has dropped by 2.7 percent since the beginning of 2017, while home values are up only 2.2 percent, according the report.
In other words, while the stock market has seen a huge rally recently, the housing market has remained stagnant.
The median home value has risen only about $1,100 since April, according for the most recent U.S. Census.
This is not good news for the homeowners looking to buy their first home, as their incomes have declined, and they have little in the way of savings.
In addition to the lack of demand for homes, Powell said that the housing recovery is only beginning.
“It is a process that we believe will continue for some period of time,” Powell said.
“As this recovery is underway, we expect to see a continued upward trend in housing prices, with modest gains in the coming months.”
This isn’t the first time the Federal Reserve has signaled that it is preparing to let things get out from under the housing bubble.
During the financial collapse, the Fed started raising interest rates to help the housing markets recover.
Now that it has recovered, Powell is signaling that the Fed may have to start easing its bond buying even more to make sure that housing prices don’t fall too much further.
“The recent housing recovery has not been uniform, but it has been encouraging,” Powell told the Wall Street Journal.
“And the economic outlook has improved.”
While the market may be heading back up, it may take a long time before the new home construction boom is over.
According to a report from Bloomberg, the United States is expected to have 2.9 million homes under construction in 2020, and another 5.5 million are scheduled to be completed by 2022.
The number of people who are expected to move into the country during this period is expected be slightly more than half the population of the U.K. The country is also expected to grow its population by more than 6 percent from 2019 to 2020, according according to the U-M Housing Institute.
The growth in the number of Americans moving into the U, and therefore, the number that will need to move back into the United from abroad, is expected continue, according with a report by Bloomberg.