Wages need to catch up with the real estate market. That won’t happen with the Fed slowing down the economy.
The economy is not slowing down now, with the Fed rates as they are. Wages have been catching up for two years in a row now. Wages are actually on a roll. One of the biggest areas of mortgage finance growing recently is refinancing. That happens when two things conjoin - market values have gained considerably, producing “equity”, and interest rates are “good”. When refinancing is on an upswing we are in or near a housing bubble. Nothing in the economy indicates it is slowing down too much.
ROFWL
1. Wages have been very much up. 2. But lower interest rates will affect housing - upping market values, a lot more than it will wages. With the Fed printing more money housing will get even more expensive for 1st time buyers, not less. 3. Investor buyers jump in with the cheaper financing, hoping they will be able to sell before the fed’s bubble bursts, just like they tried to do last time. 4. Homeowners will refinance more, take any additional equity in cash, adding more spending money to corporate revenue already NOT hurting.
Shades of 2006 all over again.