It’s going to be a bruiser. Nationwide.
Inventory is going up.
Rates are going up.
Stocks are tanking.
Layoffs are starting.
Construction is next.
New housing starts will slow due to interest rates. The market correction tells you everything you need to know.
Free money being lent to banks is over. That is what caused the market to overheat, little to no risk to lenders to the consumers. The cost of money (amount banks pay to obtain money to loan) was at almost zero. That’s why savings accounts and CD’s earned less than 1%.
It was cheaper to borrow the government’s money, than to pay interest to consumers for saving their money in the banks.
The MBS market is freezing up. This will cause a real issue for the broader economy quite soon.
Just my 2 cents. If you were not paying attention. You wouldn’t have heard it on the news.
1st quarter the economy contracted by 1.6%, this quarter is looking to be worse. If you don’t understand macro economics, 2 consecutive negative quarters is a Recession. We are there and it’s going to be bad. If the Fed raises interest rates by .75 basis points in the next meeting, it will make it exponentially worse. The economy runs 9 months behind economic indicators.
Think back to 2008, what happened 1st. The housing bubble burst. What happened 2nd the Trillions of bailout dollars. Third the oil price Crisis, pushing oil to $150 a barrel. They may not have happened in quite the same order, but this is a repeat of those 2+ years.
If you have a variable rate mortgage, lock in the rate. If you are going to buy a car. Buy it now. If you have sketchy credit, be prepared for rates in the double digits. If you’re expecting the overheated housing market of the past few years. DON’T.
It is time to hunker down and cut your spending on extravagant items.
You can ignore this, but all the signs are in front of you if you care to look. If you believe what’s coming from the White House, do so at your own peril.
Layoffs so far: