30-year mortgage rates are near 8% with excellent credit. Interest rates have climbed for the past three months straight. The Fed is considering another interest rate increase for November and December, possibly pushing rates up to 8.5% or even 9%. The reasoning is that higher interest rates will "slow down inflation".
Home sales are at a 13-year low. Factor in the higher cost of insurance and the fact that property taxes are going up to unaffordable levels and the very high cost of labor and materials for home construction... and you have a real estate market that's going to crater.
I personally know several homeowners that had their homes listed for sale, but have removed them from the market in the past 2 months. They will wait and hold on to what they have for now. One real estate agent mentioned to a couple that they should keep their house off the market until at least middle of next year and then decide based on market conditions.
I'm suggesting that the U.S. economy is a three legged stool... and one of those legs is housing and private & commercial real estate. If it fails, the economy goes into a deep recession at best.
We need a real estate crash.
Young American families need homes and they are currently unable to afford them.
Home prices need to come down 30% or more.
We've been fed a lie that there is not enough housing. This just is not true; what we've had is a misallocation of capital where investors/Airbnb were eating up the homes keeping them off market for families that want to own. We need a return to normal home ownership.
Here’s the problem though: a real estate market crash would be a repeat of 2008. That recession would cause many of those young, new homeowners to lose their jobs, then their house now that they can’t afford the payments. Then the banks start hurting because they’re not getting their money back. Our banking system, because of its fractional reserve nature, counts on people paying back their loans so that the money can be reloaned to others. Other home buyers, other businesses, etc.
It causes a chain reaction that puts the entire economy into a recession at best. In 2009 the govt avoided a deeper recession by bailing out the banks. That of course is just putting a bandaid over the true problem.
The real problem is our fiat currency and Federal Reserve coupled with fractional reserve banking practices. Those two combined are a house of cards that is a pain to keep up, but must be kept up or everyone wakes up tomorrow with no money. Except for the preppers who stacked gold, silver, and bullets.
How do you dismantle such a system while keeping the economy running smoothly? You can’t. The smoothest way would be to create a metal-backed alternate currency and make everyone switch over to it simultaneously. Even that wouldn’t solve every problem, not immediately, and there would still be mass confusion and chaos.
While I do not want to see another 2008 (it was a rough time for me personally), we really need the whole economy to crash. Housing, stock market, all of it. Yes it will hurt but money is the only thing that ALL people "listen" to.
I used to think that the great awakening would occur when people learned about what has been done to the children. I no longer believe that. Especially with what we've seen the last month. Even Jan Halper has said this. The only thing that will wake up enough people to make a difference is their money.
I agree that our entire monetary system is a house of cards and I have no idea how we will fix that. Perhaps flushing the system is a start.
They don't give a damn about children. Many even got their kids jabbed at the Temple of Fauci
Central banking caused %99 of these problems, but your right. We can’t ease off the heroin. In 2008 Ron Paul said a hard fast crash is better than endless bailouts. He said the system is going down and the longer we can kick the worse it’ll be. He said a prolonged slow bailout bail in, could destroy civilization. At least with a hard fast crash over 6mths to 1year. People have enough in savings to local support to get through. Problem is….. stretch that out into 5 years 10 years and society may never return.
Look at what the imf had done to the 3rd world. Constant debt, loans, interests. They’ll never get out. If all the debt on this planet was paid off, the system would crash. Technically, there’s more debt than money so we can never come close to paying off the debt. It’s a Ponzi scheme. It’s over.
I agree & have been trying to explain this to my family to no avail. sad because they’re making poor financial decisions, and I just have to sit back and watch. I think we’re going back to a time when America was Great and farmers, etc had respect. more agrarian…Washington thought everyone should have their own land, a place or their own.
“The phrase refers to the independence of the peasant farmer who is freed from military oppression.5 In the biblical passage there is a juxtaposition of the simple life with that of royalty or the state.6 Thus, it would seem that Washington's use of "vine and fig tree" in its full context would be an appropriate message in the setting of the American Revolution and the founding of the United States.“
https://www.mountvernon.org/library/digitalhistory/digital-encyclopedia/article/vine-and-fig-tree/
Yeah I feel like we alm will lose stuff. For our freedom it's worth it to let the deep state system go. Real money and I don't thinknit will be long before we are all back on our feet.
I think opportunity will be vast, whole industries are folding and the work they do will need doing again. Build a company.
We replaced it. It's running in the background. This is just a demonstration of the evil it is to wake normies. I'm sure it will fall and it will be the necessary scare Q posted about. It has to die it cant be fixed. It's a giant ponzi scam. Let it die. I would welcome its demise.
It's going to collapse under its own weight. Already has, we watching a controlled demolition of the fiat.
Collapse started 2019. Covid was timed as a cover.
And to add...
We've lived the roaring 20s for the last 10 years or so. People made money out of thin air instead of hard productive work. That cannot go on.
And after the roaring 20s we had a great depression. History does not always repeat but it rhymes. There will be panic. It will be scary for some. It will not be smooth. Our entire system is corrupt and it must be destroyed to be rebuilt anew.
That is just my opinion. Gloomy though it is, I do believe that it will create happier times for our children and grandchildren.
thankful for people like you who understand how insane it is for young people right now. Prices are completely out of control and basic starter homes are out of reach for a large swathe of the population. When you try to explain it to your parents or others who grew up in the 50s-70s, they just refuse to see.
what starter homes?? they dont build them any more any new construction i see is all big high end stuff...
No kidding. Easy real estate money, trump sped the economy up so we could get ahead and prepare. All on the back of the deep state.
If we are corporate employees in what world are the employees responsible for the corporate officers financial decisions. How do their loans become an employees debt?
I suspect we are not liable for any debt since trump got in office. Any seen Nything on this debt angle besides nesara?
There is a third aspect that is actually the REAL problem.
That is: the current system allows a private business (Federal Reserve System) to not only print money out of nothing (fiat) and use fractional banking (another form of fiat), but also CHARGE INTEREST ON THE MONEY CREATED.
THAT is the primary problem. If the other 2 things were done responsibly (which they never are), we could deal with them, but the charging of interest on top of it all makes it IMPOSSIBLE to ever pay it all back -- at least, not without selling every asset that exists, including humans.
During the Great Depression, we had massive economic misery, and we also had manipulation by the Federal Reserve via money printing.
BUT ... there was ONE country in the entire world that had it even worse than the USA did, and were able to emerge within just 5 years to become the most economically prosperous nation in the entire world.
Germany.
What Hitler did for Germany from 1933-1938 is still referred to (by those unafraid to tell the truth) an "economic miracle."
The blueprint is there. We just have to follow it: Dump private central banking, bring money printing under direct control of the government, no interest charged, among other policies.
https://www.bitchute.com/video/iEP3VtQ9ZTbR/
And we’re already selling humans daily.
Great description of how we got here MAG768720.
"counts on people paying back their loans so that the money can be reloaned to others"
That isn't how that works. When a mortgage is taken the banker creates new money and it is paid back with interest. They do not loan out money on deposit. This is why inflation is a constant thing, because they are constantly inflating the money supply.
There used to be rules about how much they could create(loan) based on how much was on deposit but those rules were removed around 2008 I believe. Nope, in 2020.
"As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
I think the obvious answer to the stated dilemma is this: the cabal is making housing unaffordable so we will move to apartments in 15-minute cities. Period. End of story. None of what is happening in the real estate & financial markets is organic. It’s all part of the plan.
Next up: they’ll make energy costs and taxes so high no one will be able to afford their homes that have them.
That’s already happening.
As a home owner, what does this do to my mortgage?
If you have a fixed-rate mortgage, nothing. If you have an adjustable-rate mortgage, you're going to pay more as interest rates rise.
I guess what i am asking is if/when my house drops 30% in value, would i be able to adjust my mortgage to reflect that? Of am i stuck trying to sell at a loss?
You're stuck. If you must sell, look into a "short sale". The other alternative is simply stop paying on your mortgage and allow the lender to foreclose on your house. If you're in trouble, talk to your lender. Payments may be adjusted and such. (granted at the expense of a longer mortgage) Doing either of these will likely negatively impact your credit rating. I figure a short sale would be the least impactful though. (other than extending your mortgage length)
Since you're already stuck, you may consider holding on if you can. The market is stupid right now and inflation keeps soaring. It is possible that your salary may rise over time, allowing you to pay down your mortgage so that you are no longer "upside down" and this would allow you to sell your house as normal; albeit at a loss from what you paid for it.
Disclaimer: I am not a finance person. I take no responsibility for what I have provided. Do your homework and seek out proper financial guidance.
As a homeowner there is nothing to worry about since there is no reason for anybody who bought more than a year ago to have an adjustable-rate mortgage. Nothing changes as long as you wait a few years before you sell. If you have owned the property more than 5 years you certainly have equity even after this past year's drop in values. When interest start falling more buyers will enter the market making it easy to sell once again. People who bought at the peak of the market in 2022 will need to wait about 5 years before it makes sense to sell.
It all has a place in the market.
The problem is that it is not anything close to a free market. It's a completely rigged system that benefits homeowners at the expense of young generations. Literal trillions in underwater MBS bought up by the fed to artificially prop up home prices.
Also boomers like me have not come close to replacing themselves. They will continue to move into assisted living or die. In the next decade or so I expect there will be more houses than buyers. Time will tell.
Boomers will be retiring for the next 10+ years which will free up a lot of the housing. As people age and retire they try to simplify their housing so often buy condos or rent apartments and live off the proceeds from the sale of tier homes. Historically 2-bedroom homes were not built because it limits who future buyers could be. Boomers are such a large population that 2-bedroom condos and houses are just now becoming more common and will continue to expand.
Too true I am a boomer and moved from a much larger house to a 2 bed. Have another 2 bed in a warmer climate.
Not if we keep allowing tens of millions of illegals into the country with the promise of instant citizenship or green cards.
There has to be at least 50 million illegals in this country by now.
Very good point. Probably smoking too much hopium but I really do believe if anyone can mass deport them it will be Trump. And I really hope what I think is going to happen is going to happen.