Posted on 12/19/2022 6:41:53 AM PST by Kaiser8408a
The highest interest rates in 15 years are delaying home dreams, putting business plans on ice and forcing many Americans to agree to loan terms that would have been unimaginable just nine months ago. Biden’s anti-fossil fuel policies are helping drive up prices and The Federal Reserve is hiking rates to cool it off.
Most of all, the surge in borrowing costs is punishing the cash-poor. And it’s about to get worse as the Federal Reserve carries on with its anti-inflation campaign and keeps hiking rates next year.
As the Fed’s most aggressive interest-rate hike cycle in a generation filters through the US economy, the gap is widening between the haves and the have-nots. Even without a recession, households and businesses are feeling the financial pain.
Here’s a look at pockets of the economy that are bearing the brunt of the impact.
Housing in Holding Pattern
To trim expenses amid soaring consumer prices, the couple recently bought a freezer and stocked it with a quarter cow and half a pig sourced from an agricultural school. But they shelved their plan to upgrade to a single-family home for the time being.
“We would like to buy some land to build on, but these rates aren’t making it attractive, so we are in a holding pattern,” said Waits, who receives disability benefits.
Even in the once red-hot market of Tampa, Florida, a few people showing up at an open house is now considered a good day. “People are just waiting on the sidelines,” said Rae Anna Conforti, a realtor with Re/Max Alliance Group.
The higher rates, coupled with a surge in home values during the pandemic, pushed the monthly mortgage payment on a median-priced house to more than $2,000, up from about $1,100 just before Covid-19 hit.
(Excerpt) Read more at confoundedinterest.net ...
This has created a two-tier housing market—those who can buy houses with their own cash and those who cannot.
This increases wealth inequality—exactly the opposite of what the Democrats claim they want.
Create a “crisis.” Then act like a hero when you ride in to “fix” it.
DemocRAT playbook.
Biden & CO destroying the economy one step at a time, setting the stage for the replacement population which has no stake in the US economy and will take what ever they are given and be grateful, while the rest of us fight for a place in some homeless shelter our savings wiped out, our property, our homes sold to pay the bills.
If you have high inflation, it follows you will have high interest rates.
and all of this was done by liberals to fight Covid. I think most of the people running for office in the midterms didn’t push this hard enough.
All of this mess is liberals fault! All of this is due to how liberals reacted to Covid!
And the idiot fed based their decision on fake unemployment data from BLS.
It’s really zero job growth over last 5 months.
Blame Congress, for changing their mandate from fighting inflation to doing that, AND keep unemployment low. Now gov weinies can game the unemployment rate and tank our economy via the idiot Fed.
Like they just did.
Major crash coming.
Home costs will come down...
We have had such low rates for so long, that the price of 3% mortages are baked into home prices...
Now that rates are 6-7%, (more than double, but historically not really that bad).. the monthly payments do not buy the same amount of house... a $1000 mortgage payment at 3% buys you a 240k house ... a $1000 mortgage payment at 6% buys you are 170k house.
Housing prices have this 70k of cheap money baked in and sellers are slow to lower their prices to what the market will truly cover. However it will happen... just takes time.
Its not like people don’t want to buy a home, but the pool of buyers who could afford a 240k home 2 years ago is not sitting at being able to buy 170k homes... and those 240k homes sold a few years back are under water if they need to sell now, so are slow to lower their price.
The market will adjust but it will take time... Approximately 20 years of insanely cheap money, has come to an end.
“The higher rates, coupled with a surge in home values during the pandemic, pushed the monthly mortgage payment on a median-priced house to more than $2,000, up from about $1,100 just before Covid-19 hit.”
Transitory.
Let’s Go, Brandon! *SPIT*
My Mom has a 3-bedroom ranch on a small-ish lot in a no-longer ‘good’ neighborhood in the town where I grew up. She just had it appraised. A local Realtor told her she can get $300K for it. Surreal.
Americans are spoiled rotten babies.
They will have to do as all of who bought homes back in the days with high interest rates. I remember paying 12% for our first home.
Instead of the $450k starter with the home theater in the completed basment and the she shed in the backyard they will have to buy the $300k home with the bare concrete walled basement, fix it up sell it for a profit and move up.
Carter’s were higher but Joe still has time.
I’m an aging boomer. I remember double digit inflation, double digit mortgage rates, energy shortages, wage and price controls, foreign policy disasters, crappy vehicles. Fasten your seat belts. The voters and those they have elected are taking us back to the seventies.
Just wondering the effects of a $3T commercial debt rollover in 2023 at .these higher rates will be? There’s a reason corporations need these profits now.
Bingo Gringo!
“energy shortages”
Back in the 70s that one was manufactured......just like this one.
The same people howling about high interest rates were fat & happy when FED kept rates way below real inflation for years and years.
“My Mom has a 3-bedroom ranch on a small-ish lot in a no-longer ‘good’ neighborhood in the town where I grew up. She just had it appraised. A local Realtor told her she can get $300K for it. Surreal.”
The median price for homes in my town went up from $560,000 last year to $695,000 this year.
That’s surreal...
“$3T commercial debt rollover in 2023”
Yup—That is the elephant in the room and why I tell people to get out of the stock market for now.
I would be stunned if there were not a major stock market crash and bear market in the next two years. It is being held together with duct tape and bailing wire.
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