- Watch The JD Rucker Show every day to be truly informed.
It is often said that those that refuse to learn from history are doomed to repeat it. More than a decade ago, the Federal Reserve created the most epic housing bubble in American history and everyone was happy until 2008 came along. The economy slowed down, home prices crashed and the ensuing chaos on Wall Street spawned an endless series of movies, television specials and documentaries. But instead of learning our lessons, we did it again. The Federal Reserve created an even larger housing bubble, and I have been relentlessly warning that it would inevitably burst. Now home sales have fallen for six months in a row and prices are crashing again. In fact, in some parts of the country we have already seen prices plunge by as much as 20 percent…
Property prices have fallen by up to 20 percent across parts of the US as buyers shun the market amid ‘Bidenflation’ and spiking interest rates.
Asking prices have plummeted by up to $400,000 in wealthy areas while poorer neighborhoods have seen house values nosedive by as much as $115,000.
Do you remember last time around when millions of homeowners ended up “underwater” on their mortgages?
If we continue on this current trajectory, it is going to happen again.
Last year at this time, the housing market was extremely hot, but now a new report from Redfin is telling us that things have dramatically changed…
A May study by Redfin found that about 19 percent of sellers dropped the prices on their homes in a four week period between April and May. The outlet said that the report indicated an end to the country’s pandemic-era housing boom.
Their report found that Google searches for ‘homes for sale’ were down 13 percent from the same time last year.
It also found that requests for home tours were down 12 percent, and that mortgage applications dropped 16 percent from a year prior.
And the higher mortgage rates go, the worse things are going to get.
Unfortunately, mortgage rates are spiking at a rate that is absolutely breathtaking this month…
Mortgage rates jumped sharply this week, as fears of a potentially more aggressive rate hike from the Federal Reserve upset financial markets.
The average rate on the popular 30-year fixed mortgage rose 10 basis points to 6.28% Tuesday, according to Mortgage News Daily. That followed a 33 basis point jump Monday. The rate was 5.55% one week ago.
The last time we saw mortgage rates this high was during the last housing crash.
Unfortunately, they are only going to go higher because the Federal Reserve wants interest rates throughout our economy to rise in order to fight inflation.
But as I have warned repeatedly in recent months, a high rate environment is going to absolutely eviscerate the housing market. Already, higher rates have had a colossal impact on home affordability…
Higher home prices and rates have crushed home affordability.
For instance, on a $400,000 home, with a 20% down payment, the monthly mortgage payment went from $1,399 at the start of January to $1,976 today, a difference of $577. That does not include homeowners insurance nor property taxes.
It also does not include the fact that the home is about 20% more expensive than it was a year ago.
Vast multitudes of potential home buyers will be forced out of the market until home prices comes down dramatically.
If you are one of those people, you could try to rent a place while you wait, but apartment rents are 15 percent higher than they were a year ago…
A new report from Redfin shows that nationally listed rents for available apartments rose 15% from a year ago. And the median listed rent for an available apartment rose above $2,000 a month for the first time.
Rents are up more than 30% in Austin, Seattle, and Cincinnati. In Los Angeles the median asking rent is $3,400. Even in formerly affordable cities such as Nashville it’s now $2,140, up 32% from last year.
I am so thankful that Redfin gives us these numbers, but it turns out that Redfin is in deep trouble too.
In fact, Redfin just announced that they will be laying off 8 percent of their workers…
Real estate firms Redfin and Compass are laying off workers, as mortgage rates rise sharply and home sales drop.
In filings with the Securities and Exchange Commission, Compass announced a 10% cut to its workforce, and Redfin announced an 8% cut.
Shares of both companies fell Tuesday. Redfin’s stock touched a new 52-week low.
So many of the exact same things that we witnessed back in 2008 are happening again.
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The economy is slowing down.
Big corporations are starting to lay off workers.
Home prices are starting to collapse.
And there is a tremendous amount of pessimism about what is ahead. In fact, one new survey has found that small business owners are “feeling their gloomiest in nearly five decades”…
Small business owners in America are feeling their gloomiest in nearly five decades, a survey released Tuesday morning showed.
The National Federation of Independent Business (NFIB) said its gauge of businesses expecting better business conditions over the next six months fell to the worst reading in the 48-year history of the survey.
When things got really bad in 2008 and 2009, the Federal Reserve responded by pushing interest rates all the way to the floor, and that certainly helped.
But now the Federal Reserve doesn’t have that option.
In fact, the Federal Reserve seems quite determined to dramatically raise rates in a desperate attempt to fight the inflation monster that they had a major role in helping to create.
And the higher that rates go, the worse things will get for the housing market and for the economy as a whole.
If we would have learned some lessons from the last crisis, all of this could have been avoided. But instead we are now moving into a future which is going to be extraordinarily painful.
At this point, the Federal Reserve is stuck between a rock and a hard place. If they don’t raise rates, inflation will continue to spiral out of control.
But if they do raise rates, they will crush the housing market and make the coming recession far worse.
For years, they assured all of us that they had everything under control and that they knew exactly what they were doing.
Now everyone can see the truth, but unfortunately it is too late to reverse course.
***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***
Image by Nicolas DEBRAY from Pixabay. Article cross-posted from Michael’s blog.
Controlling Protein Is One of the Globalists’ Primary Goals
Between the globalists, corporate interests, and our own government, the food supply is being targeted from multiple angles. It isn’t just silly regulations and misguided subsidies driving natural foods away. Bird flu, sabotaged food processing plants, mysterious deaths of entire cattle herds, arson attacks, and an incessant push to make climate change the primary consideration for all things are combining for a perfect storm to exacerbate the ongoing food crisis.
The primary target is protein. Specifically, they’re going after beef as the environmental boogeyman. They want us eating vegetable-based proteins, lab-grown meat, or even bugs instead of anything that walked the pastures of America. This is why we launched a long-term storage prepper beef company that provides high-quality food that’s shelf-stable for up to 25-years.
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It was an over-heated market. It will be good to open up more home ownership. This country needs the stability of property owners invested in its future.
Hope every single beautiful house in Detroit sells and that city comes back to life again. This is the moment for home ownership revitalization – incredible bargain in those formerly wealthy cities – they left a fabulous housing inventory behind.
Fabulous? OK, another alphabet neighborhood coming to a crime ridden city near you soon! Lock your kids up and keep them away from parades…no matter how innocent sounding.
In what world is, “… the moment for home ownership revitalization…”? Did you not read the article? Maybe you just don’t believe it. Your displaced optimism is typical of too many people today. Open your eyes and read the writing on the wall.
Contact your Senator/congressman, these “corporations” help hype up the housing boom. Then when the market crashes, they will demand U.S. Government Bail Out money to the sum of Trillions of dollars.
The rich uneducated real estate group will pocket millions, the lower class will turn to subsidies, and the hard working HONEST middle class will pay with their tax dollars to support these morons!
WHERE DID AMERICA GO WRONG? AMERICANS ARE TRADING THEIR RIGHTS AND THERE BACKBONE FOR LEFT OVER SCRAPS FROM BAILOUTS.
When I was 18, I got talked into a “finance here” car dealership. I was fully aware of the higher price, weekly cashiers checks, and elevated interest rate. As a man I accepted the personal responsibility for that action. 2 months later, I moved across the country. I could have EASILY dumped the car, and let the dealership spend thousands trying to recover the vehicle 3000 miles away. MY IMMIGRANT PARENTS informed me that that was extremely wrong and dishonest. My dad made me pick up a second job as a custodian so I could do the right thing. I ended up paying 3 times as much for the cheap car. And even though I had to work 2 labor intensive jobs for over 2 years, I paid off the car and got the title in my name. My dad made a photo copy of the cars title. For my 21st birthday, he framed it for a present. I have hung that in EVERY PLACE I WORKED OUT WAS STATIONED AT IN THE MILITARY!
But Obama…I mean Biden…stated that he was sick of the lies today in a speech. Surely a non-elected, installed, leader would not lie to the American public (again)…would he?
When housing prices go down, huge investment companies like Blackrock will swoop in and buy up even more real estate to turn more former owners into renters. “You will own nothing and be happy.”
Exactly, A few weeks ago I saw a video where a conglomerate in Canada I think, has been buying up homes that are for sale all over the US. Then they rent them out.
I remember well the 2007 (sorry, you’re off a year) housing crash. I worked for Merrill Lynch in their Loan Servicing REO (bank owned homes) department. I had a huge inventory that was growing by the day due to foreclosures. That was bad enough, but then the inevitable began to happen. Everyday I came to work and was handed a list of banks that had failed. Every DAY, not week or month. Since my job was selling the bank owned homes I would have to go through all of my pending sales, determine whose loans were with a failed bank and tell the buyers there loan was gone and they would have to find another bank. That was the start of the banking crisis and the credit freeze. I went to work for the FDIC during that period and it was UGLY. By 2013 the obumbles misadministration was claiming the banking crisis was over, but it wasn’t. Not even close. We simply lowered the liquidity threshold to the point where a bank literally could not fail by FDIC standards. That didn’t mean they were solvent. It just meant we weren’t going to go rescue them which was the sole reason for the existence of the FDIC.
To this day you couldn’t get me to put money in a US bank. Nothing has changed and THIS banking crisis, which will become apparent by the end of 2022, will wipe out two or three generations, or more, of wealth.