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.
The Federal Reserve System is an abomination and must be destroyed.
No arugment there.
HOWEVER ...
Interest rates are largely driven now by the US federal government's massive debt. $33+ trillion and now with no cap (i.e. no more debates about spending too much).
That massive debt was mostly taken on with much lower interest rates.
It now has to be refinanced with higher and higher interest rates.
In about a year, the INTEREST ALONE that the federal gov't will pay will be more than the ENTIRE BUDGET was about 20 years ago.
And the rate of increase in interest expense is accelerating.
This will push interest rates higher, NO MATTER WHAT THE FEDERAL RESERVE DOES.
There are criminals running the Federal Reserve System, but even worse criminals running Congress.
Let's hope we put the onus on the agent of the debt. The incorporated government. They took the loans. Im paying the loans I took.