Building Your Dream Home Has Never Been More Expensive  | WHAT REALLY HAPPENED

Building Your Dream Home Has Never Been More Expensive 

Surging construction costs to build a new home is not sustainable and is becoming a pain in the arse for homebuilders and prospective homebuyers. From concrete to lumber to copper pipes to paint and even appliances, costs have surged over the past year.

The housing boom sparked by the Federal Reserve during the virus pandemic was built on historically low mortgage rates (thanks to Powell) and accelerated by a combination of record-low inventory as city-dwellers moved to rural areas amid the remote-work phenomenon.

According to Zillow Group Inc, the past year has been the hottest real estate market since 2007. Economist Robert Shiller, the co-founder of the S&P CoreLogic Case-Shiller home price index, recently told CNBC that "in real terms, home prices have never been so high. My data goes back over 100 years, so this is something."

Making matters worse is a shortage of materials as there is just too much demand from builders and not enough supplies due to supply chain disruptions. There's also the issue of not enough buildable land. All of this has manifested into dangerous inflationary pressures vibrating not just through the housing market but the entire economy that may force Federal Reserve to announce tapering at Jackson Hole. It wouldn't be surprising if MBS purchases from the Fed would be some of the first to be reduced.

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