The current numbers are awful, and they are going to get even worse if the Federal Reserve pushes interest rates even greater. We were cautioned that high rates would have a massive negative influence on the economy, which is exactly what has taken place. Layoffs are method up so far this year, the industrial real estate market is absolutely imploding, and we are witnessing things happen in the housing market that haven’t happened in more than a years. For example, recently it was revealed that sales of existing houses have actually fallen to a level that we have actually not seen because 2010…
Sales of previously owned houses dropped 2.2% in July from June to a seasonally adjusted, annualized rate of 4.07 million systems, according to the National Association of Realtors.
Sales were 16.6% lower compared to July of last year. Homes sold at the slowest July pace since 2010.
Obviously in 2010 we were still dealing with the aftermath of the real estate crisis of 2008 and 2009.
Needless to say, returning to such a depressed level is not an advantage at all.
Compared to July 2021, sales of previously-owned houses were down 32.5 percentin July 2023.
So just about a 3rd of the whole market has been eliminated by greater rates.
And economic experts at Fannie Mae are alerting that this might be the beginning of a “prolonged freeze”…
The U.S. real estate market might be stuck in a prolonged freeze.
Fannie Mae economists predicted in a modified projection that stagnation in the housing market could last into 2024, whether the economy prevents an economic crisis or not.
“Despite whether a soft landing is attained over the coming year, we expect existing home sales to stay controlled and within a tight range,” they wrote.
The primary factor for this “prolonged freeze” is greater rates of interest.
Recently, the average rate on a thirty years fixed home loan shot up to the greatest level that we have seen since 2001…
The average rate on the standard 30-year set home mortgage increased once again today to the highest level given that 2001, spelling a lot more discomfort for buyers in a market where real estate price is currently at an all-time low.
Freddie Mac’s newest information launched Thursday shows the typical rate for a 30-year fixed note has actually reached 7.23%, marking a second successive multi-decade record after recently’s average reached 7.09% for the first time given that 2002.
Home loan rates have moved so significantly over the past number of years, and they are now far greater than they were prior to the pandemic…
Freddie Mac reported that rates on the popular 30-year fixed mortgage rose to 7.23% today, well above the 5.55% rate tape-recorded one year ago and the pre-pandemic average of 3.9%.
It marks the highest level for rates given that 2001.
As a result, countless possible house purchasers are being required to stay on the sidelines because they merely can not pay for the payments that they would be facing if they purchased a home right now.
And countless prospective home sellers are also being required to stay on the sidelines.
Well, millions upon countless Americans are presently locked into home loans at extremely low rates.
Selling a house that has a home loan at an extremely low rate and buying another home that features a home loan at a much greater rate is not an appealing proposal for most of them.
So present owners are staying put in unprecedented numbers, and as a result the number of homes on the market is “down 46% from the typical quantity before the COVID-19 pandemic started”…
The variety of offered homes on the market at the end of July was down by more than 9% from the very same time last year and down 46% from the normal amount prior to the COVID-19 pandemic started in early 2020, according to a recent report from Realtor.com.
If houses are not offering, the remainder of the economy feels the pain as well.
This is a point that Mish Shedlock made incredibly well in a post that he recently authored…
If people are not buying homes, they are not buying as much furnishings, landscaping, paint, appliances, cabinets, and mower, and so on, to the very same level if real estate was strong.
This indicates truckers are not delivering as much products as they would be otherwise.
As long as real estate is in the rain gutter, need for goods and services associated with housing will remain in the rain gutter and so will demand for delivering those items.
He is right on target.
All over the nation, economic activity is slowing down.
And that indicates that there will be more layoffs. For instance, on Thursday T-Mobile announced that it will be giving the axe to countless extremely paid workers…
T-Mobile on Thursday revealed it plans to lay off 5,000 workers, or around 7% of its total staff, over the next 5 weeks.
The decreases will mainly impact business and back-office tasks that are “mainly duplicative” to other roles and will reduce the company’s middle management layers, CEO Mike Sievert said in a letter to staff members Thursday. The company likewise plans to reduce its spending on “external employees and resources,” but its retail and “customer care” personnel who work directly with customers will not be impacted, he said.
Sadly, if interest rates stay high this will be just the pointer of the iceberg.
However instead of realizing the damage that has actually been done and cutting rates, Fed officials are informing us that rates might go even higher…
Federal Reserve Chairman Jerome Powell alerted on Friday that additional rate increases might be required to put inflation on a persuading path to the central bank’s two percent target.
“Although inflation has moved below its peak– a welcome advancement– it remains too expensive,” Powell stated in his keynote address at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. “We are prepared to raise rates further if suitable, and plan to hold policy at a restrictive level until we are positive that inflation is moving sustainably down toward our goal.”
This is suicidal.
They are expected to be the “specialists”, therefore they need to comprehend what greater rates would mean for the economy.
However it looks like they are going to raise rates anyhow.
So I would encourage all of you to brace yourselves for a duration of extreme economic pain, because it appears that is what remains in shop for us.
About the Author: My name is Michael and my brand name brand-new book entitled”End Times” is now available on Amazon.com. In addition to my new book I have composed six other books that are offered on Amazon.comincluding “7 Year Armageddon”, “Lost Predictions Of The Future Of America”, “The Starting Of The End”, and “Living A Life That Actually Matters”. (#CommissionsEarned) When you buy any of these books you help to support the work that I am doing, and one manner in which you can truly help is by sending out copies as giftsto friends and family. Time is brief, and I require assistance getting these warnings into the hands of as many individuals as possible. I have actually likewise started a brand name new Substack newsletter, and I encourage you to subscribe so that you won’t miss out on any of my short articles. I have actually published thousands of posts on The Financial Collapse Blog, End Of The American Dreamand The Most Important News, and the short articles that I release on those websites are republished on dozens of other prominent websites all over the world. I constantly easily and gladly permit others to republish my posts by themselves sites, however I likewise ask that they include this “About the Author” section with each post. The material contained in this post is for basic details functions only, and readers ought to consult licensed experts prior to making any legal, business, monetary or health choices. I motivate you to follow me on social media on Facebookand Twitter, and any method that you can share these short articles with others is definitely an excellent aid. These are such troubled times, and individuals need hope. John 3:16 tells us about the hope that God has actually offered us through Jesus Christ: “For God so liked the world, that he provided his only begotten Child, that whosoever believeth in him need to not perish, however have everlasting life.” If you have actually not currently done so, I highly urge you to welcome Jesus Christ to be your Lord and Rescuertoday.