Post by Victor VVV on Jun 20, 2022 12:43:22 GMT -5
www.youtube.com/watch?v=e1eGMw6lxEc
Housing Crash Imminent: As Mortgage Rates Explode Price Cuts Soar
And Buyer Demand Collapses
59,477 views Jun 19, 2022
We obviously didn’t learn from our past mistakes. And today, we are seeing another
massive housing bubble – even larger than the previous one – falling apart right
before our eyes again. The Federal Reserve has created the perfect conditions for
another financial disaster to occur, and the next housing market crash is about
to wipe out millions of American families whose main asset is their home, while
the economy faces a dramatic slowdown, and chaos takes over Wall Street. Even
after economists, real estate experts, and market strategists relentlessly
warned that this bubble would inevitably burst, authorities just continued
to fuel its growth month after month, and year after year. But a reckoning
has come - and the crash we’re going to witness will be absolutely breathtaking.
Home sales have been steadily falling for the past six months, and prices just
started dropping like a rock.
About a month ago, when mortgage rates surpassed the 5% mark for the first time
in nearly a decade, real estate agents and industry executives shared a series
of devastating anecdotes validating the worst fears of millions of Americans:
the U.S. housing market was imploding again. Since then, the downfall has gained
speed, with subsequent observations confirming that property values were sharply
dropping, a dire outlook for the most popular asset class among middle-class
families.
Last week, however, things have gone from worse to catastrophic as 30-year mortgage
rates surged at the fastest pace ever recorded, hitting 6.28% - a rate last seen
just before the last housing bubble burst. As ZeroHedge analysts recently highlighted,
the latest rate hike sent the average mortgage payment on a median mortgage up by
almost $800 in just the past 6 months, resulting in the most unaffordable housing
prices in the entire history of America. On top of that, new home sales have plunged
at the fastest pace since the peak of the health crisis, right after facing the
longest negative streak since 2010.
Right now, homebuyer sentiment is at the lowest level in generations, and conditions
continue to deteriorate with each passing week. According to the latest housing market
summary released by real-estate brokerage Redfin, things are not pretty at all. The
report shows that after a period of unprecedented gains for home prices and a uniformly
sellers' market, conditions have drastically flipped, and now real estate agents are
seeing the highest share of sellers on record dropping their list price as mortgage
rates shoot up to levels not seen since 2008, shrinking the pool of potential home buyers.
Most of the markets that benefitted from pandemic migration patterns and recorded
massive price gains have started facing a correction. Realtor.com released a report
that shows the top ten cities across the country where the median price has dropped.
On average prices have fallen by 20%, with asking prices “plummeting by up to $400,000
in wealthy areas while poorer neighborhoods have seen house values nosedive by as much
as $115,000,” it revealed.
As inventory piles up, and demand hits a wall, sellers are left with only one choice:
cutting the price enough to where the next buyers can afford the mortgage.The Federal
Reserve, on the other hand, is stuck in a crossfire. After letting inflation run wild,
their only choice is to keep on raising rates and triggering chaos in financial markets.
They have repeatedly told us that they had everything under control over the past few
years. They said they knew exactly what they were doing. Once again, they lied. And the
truth is that the Housing Bubble Burst 2.0 has begun. And sadly, it is already too late
to reverse course.
Epic Economist
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