US housing market could be headed for ‘meltdown,’ economist warns

The US housing market could be on the verge of a “meltdown,” an economist warned following this week’s release of data showing a collapse in home builder confidence in July.

US home builder confidence plummeted 12 points to 55 in July, according to the latest data from the National Association of Home Builders/Wells Fargo Housing Market Index released Monday.

Sentiment has declined for seven straight months and is now at its lowest level since May 2020 — with more trouble potentially ahead for homeowners.

“Homebuilders have been in denial about the extent of the drop in demand, despite mortgage applications falling by more than a quarter over the first half of the year, with no end in sight to the decline,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “Now, they are acknowledging reality.”