Housing is about to stumble and it won’t stop there. Liquidity is drying up on multiple fronts simultaneously.
Mortgage Rates – Weekly Ending Thursday Since 2007
Mortgage rates are inching higher and higher. The chart numbers are as of last Thursday.
Current Rates From Bankrate.com
Huge Jumps
Rates are still low historically, but home prices sure aren’t.
Home Prices Jump Another Percent
For details please see Home Prices Jump Another Percent, Fed Extremely Behind the Inflation Curve.
Fed Support
The Fed has encouraged housing speculation by keeping interest rates low. Half of its monthly QE asset purchases have been mortgage-backed securities.
That support ends in February or early March.
What Can Go Wrong?
Refinancing Liquidity
Low rates also put money into people’s pockets via refinancing at a lower rate. We also had cash out refis.
That liquidity support ended as well. Anyone who could have profited by refinancing has already done so.
It would take new lower rates for another refi boom to happen.
Pending Homes Sales Unexpectedly Decline 3.8 Percent in December
Add it all up and the overall liquidity drain is massive. Housing rates to cool and there are signs of that already.
For discussion, please see Pending Homes Sales Unexpectedly Decline 3.8 Percent in December.
The Huge Stock Market Bubble Just Popped and the Fed Can’t Rescue It
The stock market and related euphoria also supported housing. 17 percent of recent purchases were made by people who already owned a home.
Also consider The Huge Stock Market Bubble Just Popped and the Fed Can’t Rescue It
The stock market highs supported all kinds of purchases, including autos, travel, dining, and real estate.
With Nearly Everyone Looking the Other Way, It’s Time to Discuss Recession
Liquidity is drying up on multiple fronts simultaneously.
That is why With Nearly Everyone Looking the Other Way, It’s Time to Discuss Recession.
This article was originally published by Mish Talk.
Canada is home to more than 800 species of wild bees — few may have… Read More
Cocoa prices have dumped since rocketing to a dramatic peak last month as an El Nino cycle… Read More
To anyone living in a city where autonomous vehicles operate, it would seem they need a… Read More
Homeowners associations (HOAs) are notorious punching bags, shamed for bullying widows to mow the lawn… Read More
Tanzania has recently begun to re-emerge from a period of damaging isolationism under former president… Read More
In this graphic, we list the 15 best U.S. companies to work for in 2024,… Read More
This website uses cookies.