U.S. housing market shows signs of a 2008-like bubble, warns analyst.

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The U.S. housing market is showing alarming signs, with a situation eerily similar to the 2008 housing bubble. Real estate analyst Nick Gerli points to the recent surge in new inventory, which has led to vacant homes reaching levels unseen since the Great Financial Crisis. Speculative homes—newly built houses anticipating easy sales—have reached their second-highest level ever.

The inventory of new construction single-family homes for sale has hit its highest point since 2007. This influx of new homes has resulted in a significant rise in unsold properties, many remaining vacant due to high prices that are unaffordable for most buyers. As of November 2024, the median sale price of a home in the U.S. was $430,010, reflecting a 5.4% increase compared to the previous year. The number of homes for sale rose 10.3% year over year, reaching 1,689,082, while the number of homes sold increased by 4.4%.

This situation is most pronounced in the South and Mountain West regions, where builders continued constructing homes during the pandemic boom, even as buyer demand began cooling in late 2024. States like Texas, Florida, Arizona, Tennessee, and Georgia are the hardest hit by the growing inventory. In these regions, active listings on the resale market have spiked, returning to pre-pandemic levels. Gerli predicts that home prices in these areas will drop in 2025, especially in suburban and rural locations where builders have been most active.

In addition to the housing crisis, the U.S. manufacturing sector has been struggling for over two years. The sector initially saw a boost in early 2021 due to the reopening following pandemic-related shutdowns, but quickly turned sluggish, even shedding jobs. Rising costs, labor shortages, supply chain disruptions, and technological changes have further hampered the sector. Despite these struggles, manufacturing CEOs remain committed to transforming the industry through innovation, smart manufacturing, and a focus on sustainability.

The challenges in both the housing and manufacturing sectors highlight a broader economic uncertainty. The surge in unsold inventory, especially in new speculative homes, signals potential trouble for the housing market, reminiscent of 2008. Meanwhile, the manufacturing sector’s ongoing struggles reflect deeper structural issues in the economy.

New construction single family home inventory for sale hits highest level since the Great Financial Crisis.

Prices collapse to 2021 levels pic.twitter.com/xVHP7pnOkI

— Darth Powell (@VladTheInflator) December 26, 2024

Construction costs remain near their record high, preventing homebuilders from appreciably reducing selling prices despite today's higher interest rates: pic.twitter.com/fFUxsSixPe

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 26, 2024