The housing market of the USA has shown the early trend of recession. If the trend continues, the housing market will go through a recession by 2020 Presidential Election.
Benn Steil, the director of international economics issued a warning statement after analyzing the current trend. The gap between household income and home prices are increasing day by day. As a result, the market can see a similar result like the 2008 financial crisis.
In 2005, the housing price began to drop like in 2018. So, it is recommended to take action from such an early period.
The household income is growing in the United States but it is failing to keep up with the increase in house prices. The stats prove the same as well. According to data published by Sentier Research, household income increased by 1.3% in the month of August compared to 2018 August. While the National Association of Realtors revealed that the average home price increased by 4.7% during that period.
The home-sale growth is going down since 2015. Last year, the growth was in negative territory. A similar trend has recorded before every major recession since 1970.
The early warning can awake the government to take the countermeasure before its too late.
