Why the Housing Market Is About to Get Much Worse

Via Birch Gold Group

Why The Housing Market Is About to Get Much Worse

From Peter Reagan

The “American Dream” of home ownership is already out of reach of most Americans, thanks to the 50% increase in home prices over the last couple years. Homeowners who’ve purchased since the beginning of the most recent housing bubble are already regretting their decision, based on the chaos in the housing market.

Why does this matter?

It’s hard to overstate the importance of housing in the U.S. economy. For nearly every American family, their home is their single biggest asset.

Now, we don’t generally think of our homes as an “asset” because we live in them. We usually think of them as a necessity that happens to have a market value.

However, most American families actually do treat their homes as financial assets. For example: Continue reading “Why the Housing Market Is About to Get Much Worse”

Here’s Why the Housing Market Has Gone from Overheated to Raging Inferno

From Birch Gold Group

Here's Why the Housing Market Has Gone from Overheated to Raging Inferno

The housing market is on the verge of spinning out of control. Just about everything that could be going wrong is going wrong.

The only holdout for the moment is home prices, which are up an astonishing 22.5% just this year. For many homeowners, that’s great news. Home equity is a huge source of wealth for middle-class Americans. And when home prices are high (just like when stock prices are high), you feel wealthy.

Continue reading “Here’s Why the Housing Market Has Gone from Overheated to Raging Inferno”

IS GOOD NEWS BAD NEWS?

Both surveys from the Bureau of Lies and Scams showed a huge increase in jobs during October. That’s funny, because Challenger, Grey and Christmas keeps showing lay-off announcements up 40% over last year. Of course, the good old Birth/Death adjustment added 165,000 phantom jobs into the calculation, so I’m sure its accurate. Everyone knows there are new businesses opening every day, hiring hundreds of thousands of high functioning millennials. Supposedly the single biggest driver of new jobs was among those with a high school education or less. I’m sure those are high paying jobs.

The Federal Reserve had already decided they needed to raise rates by .25% before year end to bolster their non-existent credibility. What better than an employment report that was 50% higher than the highest Wall Street bank estimate. What a coincidence. I wonder how the soaring USD will impact the profits of our international conglomerates? Oops.

So the market sold off in August and September because the economy was clearly weakening. Then the market rallied in October because a weak economy meant the Fed would never raise rates again. Now this employment report supposedly clinches a Fed rate hike in December. Now for all the housing bulls, the 10 Year Treasury yield has spiked from 1.9% at the beginning of October to 2.3% as of this morning. And that’s before the Fed even raises rates. Can this weakening economy, with global trade going into the toilet, withstand interest rates going up by even 1%? Not a chance.

Let the spin begin. The CNBC bimbos and boobs have been using the storyline of bad economic news is good for the stock market. Now they have to pivot 180 degrees and propagandize that good economic news is actually good for the stock market. This entire bubble economy has been solely dependent upon 0% interest rates for the last six years. We’ll see how it does now.

October Jobs Soar To 271K, Smash Expectations, Unemployment Rate 5.0%, Hourly Earnings Spike

Tyler Durden's picture

If there was any doubt if the Fed would hike rates in December, it is gone now: October payrolls soared by 271K, smashing not only consensus of 184K, but the highest expected print. This was the highest monthly print since December 2014 when the gain was 329K and pushed the YTD average monthly gain from 199K to 206K.

The unemployment rate dropped from 5.1% to 5.0%, the lowest since April 2008, and most importantly, the average hourly earnings rose from 0.2% to 0.4%, the highest hourly earnings jump since 2009!

Continue reading “IS GOOD NEWS BAD NEWS?”

WHAT IF THEY GAVE A HOUSING RECOVERY AND NO ONE CAME?

Inquiring minds want to know how you can have a housing recovery when mortgage originations are at all-time lows. The bright bulbs on CNBC certainly aren’t inquiring. The Ivy League economists at the Fed aren’t inquiring. Wall Street is making bucket loads of dough with their buy to rent scam, so they aren’t inquiring. If it seems too good to be true, it’s too good to be true. There is no housing recovery. There has been a price recovery engineered by the Fed and their Wall Street owners. It benefited them and them only. The stock market isn’t the only rigged market.

Mortgage Originations Plunge To Lowest On Record

Tyler Durden's picture

New mortgage originations fell over 23% month-over-month and a stunning 47% year-to-date according to Black Knight (formerly LPS). As they show in their detailed presentation, with a 65% year-over-year drop, new mortgage originations are at their lowest since their records began and what is perhaps more concerning is prepayment speeds signal further declines are ahead and the ratio of serious deterioration to foreclosure (along with huge numbers of loan mods due to reset) suggest the housing market is anything but recovering fundamentally with the average loan in foreclosure now 2.6 years past due.

 

 

But apart from that – prices are up so that must be good right? as affordability for the average joe collapses.

QUOTES OF THE DAY

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”

Ben Bernanke – July 2005

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.”

Ben Bernanke – October 2005

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

Ben Bernanke – February 2006

“Despite the ongoing adjustments in the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low.”

Ben Bernanke – February 2007

“The Federal Reserve is not currently forecasting a recession.”

Ben Bernanke – January 2008

 

“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.” 

David Lereah, NAR’s chief economist, August 2005

“We are really on track for a soft landing. There are no balloons popping.”

David Lereah, NAR’s chief economist, December 2005

“It appears we have established a bottom.”

David Lereah, NAR’s chief economist, January 2007