Why America's housing crisis has hit a new inflection point [View all]

[brooklynite]

Axios

When an immovable force meets an unstoppable object, bad things tend to ensue. That is what is happening right now in the U.S. housing market, with homebuilders stuck in the middle.

Why it matters: The immovable force is the millions of millennials hitting their prime child-rearing years and looking for a place to live. The unstoppable object is the Federal Reserve, determined to bring inflation down using the main arrow in its quiver: interest rates.

The standoff is creating a housing affordability crisis. Builders are faced with the dilemma of whether to construct houses that buyers may need help to afford, given 7%+ mortgage rates, or to hold back and therefore make long-term housing supply issues worse.

Driving the news: New data out Tuesday morning showed housing starts in August fell 11.3% from July. That was disproportionately driven by a drop in multifamily units like apartments and condos, but starts of single-family homes fell by 4.3%, too.