Posted on 06/04/2022 7:22:33 AM PDT by 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. The housing cost index has risen 114.5% under Biden.
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.
The Federal Reserve Board of Governors playing “Hurting housing two times.”
(Excerpt) Read more at confoundedinterest.net ...
Let’s go Brandon!
In SW Florida prices are insane…mostly from out of staters moving in…houses sell in one day unseen….video of house and area
There are also reports showing more concessions by sellers on closing costs. Right now the market is balancing out but as the fraud pedojoe shartmonger bidet economic devastation kicks into full fail, we may see sales outside of cash purchases drop dramatically.
FJB and it’s merry band of moronic flying monkeys.
Remember, if you don’t support Brandon and his insane policies, you ain’t black you’re a dog faced pony soldier.
the federal govt’s massive money-printing and welfare-covid-$$$$-giveaways
still have Zillions of Americans sitting at home watching Oprah Winfrey reruns and football all day on their boobtoobs
it is a psychologically and sociologically destructive decision, but quite rational nonetheless....for people to NOT work when they are receiving as much or MORE (net) regular welfare, covid free money, free groceries, free hot restaurant meals, free transportation vouchers, free health care, free clothing, free haircuts, free telephone, free answering services, and more.....most or all tax-free, too
stop the welfare (to those able to work) and the labor markets will return to normal productive levels
Remember in the last crash the astounding number of foreclosures and walkaways? This one will make that one look like a dry run. The good news is it means there will be a lot of opportunity for everyone with actual cash or good credit, after it falls out. There will be incredible deals. People got to live somewhere.
The Federal Reserve tends to just let interest rates spike to pop a bubble.
The Federal Reserve can’t allow interest rates to remain high for long since the federal deficit would explode.
What home sellers and real estate agents could do is to buy down the interest rate.
Buying down a 5.25% to 3.99% would cost 1.26% per year.
Setting up a escrow buydown account for 10 years would be about 12.6% of the selling price.
If the Federal Reserve forces mortgage interest rate down to 3.99%, the buyers would have to refinance (or refinance could be contracted for in advance) and the escrow buydown account would be released to the home sellers, with a final cost to the home sellers of 2.52% of the selling price.
The escrow buydown account might also serve for mortgage down payment purposes, permitting the home buyers to only have to put 7.4% of their own down to avoid mortgage insurance. The release of remaining escrow buydown funds to the home sellers might be delayed as per contract.
Most places with good airline service have become very overpriced.
Yahoo posted a Moody Analytics’ map of housing overpricing about 10 days ago, which I believe is quite accurate.
A person selling a 1960s ranch house for $600,000 bought in 1968 for $25,000 isn’t hurting.
A person selling a 1960s ranch house for $600,000 bought in 1968 for $25,000 isn’t hurting.
I’m seeing the effects of it. About 20% of my contracts (for building new homes) decided to cancel because of the uncertainty.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.