Monthly P&I Payment To Purchase Price SOARS As Mortgage Rates AND Home Prices SOAR (Labor Market OVERHEATED As REAL Wage Rate Declines)

Confounded Interest ^ | 06/03/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Instead of President Ronald Reagan saying ““Mr. Gorbachev, tear down this wall” we need someone to tell President Biden and Federal Reserve Jerome Powell to “Stop driving up prices and making housing unaffordable.” Unfortunately, The Fed thinks that raising interest rates will temper price increases — it won’t. But it could tamper home price growth.

So what we are left with is soaring home prices AND soaring mortgage rates, leaving this scary chart from Black Knight of monthly P&I payment to average purchase price of housing in the US.

Its only going to get worse from here.

Today’s jobs report for May showed that the U-3 unemployment rate remained the same as April, 3.60%. However, that is lower than the NATURAL rate of unemployment of 4.445% indicating that the labor market is overheated. Historically, The Fed has tightened monetary policy by raising rates when this has happened. So, look for The Fed to keep raising rates.

As I have mentioned before, REAL hourly wage growth is negative since March 2021, just after Biden signed his executive orders canceling drilling on Federal lands and cancelling the Keystone Pipeline. Later, he canceled off-shore drilling permits and Alaska drilling. Now we have REAL average hourly wages declining at -2.8% YoY as The Fed has been reducing M2 Money supply YoY.

Listings of homes is up 11% YoY, the highest in several years.

Let’s see how the housing market does with soaring mortgage rates.

How do you spell stagflation? M-O-N-E-Y … tightening.

[Browns Ultra Fan]

Biden and Powell are doing this intentionally. Biden's handlers want to force Americans out of their cars and into public transportation AND want people to abandon the burbs and more into easily controlled cities. Except for the elitists, of course.

[qaz123]

Someone give me the layman’s version of how the Fed is driving up home prices?

Someone wants to sell. They ask a ridiculous price because now their home has gone “up” in value according to local realtors and tax assessors who are doing nothing more than squeezing more money from property owners. Toss in folks eager to get out of the cities due to crime and violence, buying homes sight unseen. Off pictures from an internet posting.

The sellers sell their $200k home for $400k thinking they’re going to get an wither bargain. When all they’re going to do is buy another overinflated $250k home.

Where does the Fed play into that?

[packagingguy]

Around work I hear people talking incessantly about flipping houses. I don’t think I have ever seen a time when asset bubbles burst but home prices keep rising as they do.

I heard this all the time in 2005...invest in housing because the sky’s the limit! Nothing but up! Now we have a situation in this area where new homes are almost 25 times the annual wages for the average person.

[Mark]

And the rent is too damn high!

[rellic]

This a problem the founders of America feared, the threat that cities pose to a country,
They tried to fix that, but the cities fuked it up with the 16th and 17th amendments.
solution- quit feeding the cities, Let the Democrats starve of resources.

[Georgia Girl 2]

We are getting ready to sell our $150,000 home for $330,000. Sometimes you just have to take the profit. 😏

[qaz123]

Make that money, woman.

I’m betting in the not too distant future you’ll be able to roll that product into something real nice when bottom drops out

Good luck.