This content is recommended for 30~60 minute sessions. Note that tutors may not be familiar with the content. Make sure you consult with your tutor before using this material.
After a quick greeting, read the following article out loud. Your tutor will go over pronunciation if necessary.
[P1] Home prices are near record highs in many cities across America, and the belief they’ll continue rising is encouraging more people to buy. The result is a higher barrier to entry for people who want to buy their first homes, according to David Rosenberg, the chief economist at Gluskin Sheff.
[P2] He drew his most recent observations on the housing market from the University of Michigan’s monthly survey that checks the consumer’s pulse on various parts of the economy. The interesting housing tidbits in the latest survey, released on Friday, showed:
- [P3] The share of people who cite rising prices as the reason why it’s a good time to buy is at the highest level of the survey’s history, going back to the late 1980s. It’s “a case of expected asset inflation becoming a self-fulfilling prophecy,” Rosenberg said in a note on Tuesday. What that means is, if more people want houses because prices are rising, prices will rise even more.
- [P4] A record 59% of people believe that home prices will rise in the coming year, as the chart shows.
- [P5] The share of people who see it as a good time to buy because of low prices is near a record low in April. “So nobody is purchasing a home because they are cheap…principally because there are no cheap homes anywhere (at least in any desirable areas),” Rosenberg said.
- [P6] Lastly, the index that tracks people who say buying a home today is a bad idea because of high prices was at a five-month high in April. “This speaks to stretched affordability for first-time buyers,” he said.
[P7] First-time buyers, with zero equity stored in another home, are confronted with the toughest hurdle even though they’re in the minority of buyers. According to the National Association of Realtors, first-time buyers were involved in 30% of home sales in March, down from 32% a year ago.
[P8] Rosenberg questioned whether all this shows that the next housing bubble is forming — an important one to ponder a decade after the financial crisis. Unlike the previous run up in prices, however, this rise is not underpinned by low-credit borrowers and investment products that bundled risky mortgages together.
Read the word/expression and definition out loud. Your tutor will go over anything you do not understand. Practice creating a sentence or two to make sure you know how to use the word/expression properly.
|barrier to entry||(n) the existence of high upfront costs or other obstacles that prevent new competitors from easily entering an industry or area of business
e.g. Real estate investments has high barrier to entry.
|tidbit||(n) a small piece of news or interesting information
e.g. tidbits of gossip
|self-fulfilling prophecy||(n) a prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior.
e.g. Use self-fulfilling prophecy to your advantage.
|confront||(v) to deal with (something, such as a problem or danger)
e.g. Firemen regularly confront danger.
|ponder||(v) to think about or consider (something) carefully
e.g. He pondered the question before he answered.
Use the following questions as a guideline to help develop an interesting conversation with your tutor. Feel free to diverge from these suggestions if anything interesting comes up.
- Summarize the article in your own words.
- What does “self-fulfilling prophecy” mean?
- Describe the housing market in your own country.
- Is owning a house important goal in life in your country? Share your thoughts with your Cambly tutor!