Jerome Powell and the Federal Reserve would like the Housing Market to crash in 2023. Home Prices could decline by as much as 20% according to the Federal Reserve Bank of Dallas.
The reason that home prices are likely to crash in 2023 is because of interest and mortgage rates. Right now Jerome Powell and the Fed are aggressively hiking interest rates. And as a result the 30-Year Fixed Mortgage Rate just hit 7%. These high rates are causing a Mortgage Collapse that is robbing the Housing Market of buyers.
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At the same time - Mortgage Defaults are surging. The Mortgage Bankers Association just announced that borrower defaults increased in Q4 2022. Particularly among low-income FHA Homeowners. These defaults are likely to turn into foreclosures later in 2023, increasing inventory and reducing home prices.
These mortgage defaults, along with an increase in subprime car defaults, are a "canary in the coal mine" for the US economy. Suggesting that a Recession could either be here or around the corner. And the longer that inflation hangs around in the economy, the worse the Recession will be. Because it's 40-Year high Inflation that is causing Jerome Powell and the Fed to hike interest rates.
These interest rate hikes are a big problem for real estate investors. Because these days it's actually more profitable to buy US Treasuries than it is to buy real estate. Right now the 1-Year Treasury Yield is around 5%, while the cap rate for owning rental properties in America averages 4.7%. No wonder real estate investors bought way fewer homes at the end of 2022.
But many of these investors are still in denial. Because they think a record low unemployment rate means the US won't hit a Recession. And that the Housing Market will be fine. However, a big surge in layoffs likely means that the unemployment rate will increase in coming months. Companies such as Twitter, Disney, Zoom, Microsoft, and Amazon have all announced big layoffs in the last several months.
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DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting's YouTube channel and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting does not establish a formal business relationship.
Image(s) and/or Footage used under license from Shutterstock.com. https://www.shutterstock.com/
Additional stock footage provided under license from Envato. www.envato.com
#HousingCrash
The reason that home prices are likely to crash in 2023 is because of interest and mortgage rates. Right now Jerome Powell and the Fed are aggressively hiking interest rates. And as a result the 30-Year Fixed Mortgage Rate just hit 7%. These high rates are causing a Mortgage Collapse that is robbing the Housing Market of buyers.
Get Free Housing Market Data on REVENTURE APP: www.reventure,app
JOIN as a Reventure CHANNEL MEMBER:
https://www.youtube.com/channel/UCVTQunGrE3p7Oq8Owao5y_Q/join
At the same time - Mortgage Defaults are surging. The Mortgage Bankers Association just announced that borrower defaults increased in Q4 2022. Particularly among low-income FHA Homeowners. These defaults are likely to turn into foreclosures later in 2023, increasing inventory and reducing home prices.
These mortgage defaults, along with an increase in subprime car defaults, are a "canary in the coal mine" for the US economy. Suggesting that a Recession could either be here or around the corner. And the longer that inflation hangs around in the economy, the worse the Recession will be. Because it's 40-Year high Inflation that is causing Jerome Powell and the Fed to hike interest rates.
These interest rate hikes are a big problem for real estate investors. Because these days it's actually more profitable to buy US Treasuries than it is to buy real estate. Right now the 1-Year Treasury Yield is around 5%, while the cap rate for owning rental properties in America averages 4.7%. No wonder real estate investors bought way fewer homes at the end of 2022.
But many of these investors are still in denial. Because they think a record low unemployment rate means the US won't hit a Recession. And that the Housing Market will be fine. However, a big surge in layoffs likely means that the unemployment rate will increase in coming months. Companies such as Twitter, Disney, Zoom, Microsoft, and Amazon have all announced big layoffs in the last several months.
---
INSTAGRAM: https://www.instagram.com/reventure_consulting/
TWITTER: https://twitter.com/nickgerli1
DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting's YouTube channel and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting does not establish a formal business relationship.
Image(s) and/or Footage used under license from Shutterstock.com. https://www.shutterstock.com/
Additional stock footage provided under license from Envato. www.envato.com
#HousingCrash