The U.S. housing market is facing dire consequences due to high mortgage rates, a housing supply shortage, and a lack of confidence in the Federal Reserve's actions, according to market expert James Iuorio.
Frequent weather catastrophes, fueled by climate change, are causing disruptions in the home insurance market, with insurers pulling out of high-risk areas, raising prices, and reducing coverage, leading to tougher choices and higher costs for consumers.
The increasing risks of extreme weather events from climate change are causing insurance companies to raise rates and pull back from high-risk areas, which could potentially lead to losses for banks that rely on insurance-backed collateral for loans.
Major insurers in the United States are reducing coverage and increasing premiums and deductibles in areas vulnerable to extreme weather events due to climate change, leaving homeowners in those regions without crucial insurance protections.
More than 80 percent of prospective homebuyers nationwide consider climate risks when shopping for a home, with millennials being the most considerate generation, according to data from Zillow.
The former economic advisor to Donald Trump, Steve Moore, warns that the US housing market is at risk of deflation due to high mortgage rates, and coupled with rising costs and inflation, individual Americans are at risk of financial strain.
The housing market faces challenges from 7 percent mortgage rates, but the downside risk to home sales is limited due to sales being driven by life events and high cash purchases, according to Fannie Mae's Economic and Strategic Research Group.
Buyers in the housing market are resilient as they face low inventory and high prices, with nearly half of homes selling above list price and many making multiple offers to secure their dream homes, according to a survey by Bright MLS.
Millions of American homeowners are facing increasing insurance costs and reduced coverage due to climate change-related risks, with properties in high-risk areas potentially becoming overvalued as insurance underprices the risk, according to a new analysis from the First Street Foundation.
The risk of insurance coverage changes due to climate-related events is high in coastal regions and is increasing in non-coastal areas, leading to potential financial hardships for homeowners.
A new study warns of a looming "climate insurance bubble" in Florida, which could result in rising insurance rates and declining property values due to the increasing risks of hurricanes and other climate-driven disasters.
Tel Aviv's housing market is considered overvalued, but less so than previously, due to high interest rates and inflation impacting property prices, according to UBS's Global Real Estate Bubble Index for 2023. Tel Aviv, along with several other cities, is at risk of a market correction.
A new report by nonprofit First Street Foundation suggests that a quarter of residential properties in the U.S. are overvalued in relation to their climate risk, with homes in states like California and Florida being more vulnerable to damages from extreme weather events such as hurricanes, floods, fires, and earthquakes. The number of homes likely to be destroyed by fires each year is projected to double in the next 30 years, reaching nearly 34,000 in total, according to the research. The overvaluation of properties due to climate risk could potentially have disastrous consequences for the housing market, leading to a deflation of the climate bubble.
Climate-related disasters in the US since 1980 that exceeded $1 billion in damage have had a profound economic impact, but they don't fully capture the hidden costs, such as mental and physical trauma, environmental damage, and supply-chain disruptions that people are paying for, as extreme weather events become more frequent and intense due to climate change.
The increase in hazardous areas, climate change, and bad policy have led to a growing number of properties in America becoming uninsurable, with insurers pulling out of vulnerable areas and homeowners facing rising rates and canceled policies.
The global risk of housing bubbles has significantly decreased in 2023, with only two out of 25 cities surveyed being at risk, down from nine in previous reports, due to rising interest rates and the end of cheap financing in the real estate sector.
Climate change is posing risks to the construction of upscale homes in Hong Kong's Redhill Peninsula, as heavy rainfall caused landslides and buildings to be perilously close to the edge, demonstrating that even costly and well-constructed homes can be vulnerable to extreme weather events.
A non-profit research group has found that nearly a quarter of all properties in the continental United States are overvalued due to a climate-insurance bubble inflated by government subsidization, with private insurers leaving risky markets and homeowners turning to state-backed insurers of last resort; policymakers should allow private insurers to set actuarially sound rates to deter reckless building and ensure the financial burden of living in high-risk areas is shouldered by those who enjoy the benefits.
Home prices have decreased in several major cities, but many remain overvalued and at risk of entering a housing bubble, according to a UBS report, with Zurich and Tokyo being identified as the most overvalued markets. UBS defines a bubble as a sustained mispricing of an asset, and factors such as price-to-income and price-to-rent ratios were used to determine the rankings. While some cities have seen a drop in prices, a housing shortage could lead to a renewed boom if interest rates fall.
Florida has become the second most valuable housing market in the US, surpassing New York, as buyers flock to the state for warm weather and lifestyle benefits, driving up home prices and new construction.
The current housing market is so unaffordable that only three extreme scenarios, including a 55% spike in US incomes, would return it to pre-pandemic affordability.
Certain housing markets, including Allentown, Bethlehem, and Easton in Pennsylvania, have experienced significant price growth over the past four years, raising potential risks for buyers. Other markets such as Knoxville, Tennessee, Cape Coral and Fort Myers, Florida, Boise City, Idaho, and Portland and South Portland, Maine, have also seen substantial price increases driven by remote work during the pandemic. While it may not be a bad idea to buy in these areas, potential buyers should not expect significant price appreciation driving equity growth in the future.
The housing market is currently considered overvalued, with homes selling above their long-term prices in most major markets, but experts disagree on whether this indicates a housing bubble or if high prices are justified due to the housing shortage and strong demand. The fear of buying at the peak of the market and concerns about rising mortgage rates are factors influencing buyer decisions, but if rates come down, it could lead to an increase in prices. While there is a possibility of a price correction, most experts do not expect another housing crash like the one experienced during the Great Recession.
The pandemic has had a varied impact on commercial real estate markets, with tech hubs like San Francisco suffering while smaller cities such as Albany, Toledo, and Omaha are considered safe havens for investors, according to a Moody's report.
Experts suggest that there are several warning signs to watch for in order to be prepared for a potential housing crash in the future, including unsustainable price rises, high inventory with slower sales, rising mortgage rates, larger economic indicators, rental vacancy rates, shadow inventory impact, social media sentiment analysis, external factors, increase in foreclosure rates, and a combination of factors.
The U.S. housing market is being negatively impacted by "Bidenomics," as mortgage rates reach their highest level since 2000, leading to a decrease in homebuyers and a limited number of homes on the market, while high inflation rates are making it difficult for Americans to afford basic necessities.
Japan's property market is at risk of overheating due to an influx of foreign investment and increased real estate development by major developers, according to the Bank of Japan, raising concerns over a potential asset bubble.
