the disaster we’re about to witness didn’t have to happen the desperate attempt to control this horrifying inflation spiral is absolutely crushing the u.s housing market and we are all going to feel the impact the coming crash in recent years irresponsible monetary policies were put in place fueling an unprecedented inflation boom that sent housing costs to extreme levels now policymakers at the central bank and politicians in washington are scrambling to tame the beast they unleashed by themselves but everyone knows that rapidly rising interest rates are gonna wreck havoc on financial markets and most notably in the housing sector when mortgage rates saw higher more and more potential home buyers are pushed to the sidelines fewer buyers mean fewer sales which translates into downward pressure on home prices this is basic economics you don’t need to be an expert to understand any of this but it seems that fed officials are either clueless or very much aware that what they’re doing is going to be exceedingly destructive to the us economy as a whole but they’re still waiting for some magical solution to come about to dig us out of this hall once again the housing market is in shambles and we’re on the cusp of a housing collapse that’ll make the 2008 crash look like a sunday picnic that’s what we’re gonna expose today but before moving on please give us your support with a thumbs up and subscribe to our channel so you don’t miss our future videos do you remember the pain that we all went through in 2008 well a similar scenario is now unfolding right before our eyes only this time things are about to get a whole lot worse even though many people in the industry who by the way have been benefiting from the growth of the housing bubble over the past two years keep telling us there’s nothing to worry about and that we will never ever experience another housing collapse the data has been telling us a completely different story in fact something that hasn’t happened in the market since 2008 actually happened again last week according to data released on thursday the average interest rate on a 30-year fixed-rate mortgage rose above six percent for the first time since the financial crisis a freddie mac report detailed that the average mortgage rate for the benchmark home loan rose to 6.02 percent last week up 0.13 percentage points from the week prior and 3.16 percentage points above its level a year ago it’s the first time the 30-year fixed rate mortgage rate was above six percent since the week of november the 20th 2008 the analysts highlighted as the financial experts at zero hedge perfectly summarized at the end of the day the jump in mortgage rates are welcomed development by the u s central bank which now wants to unleash a crippling recession on the u.

s economy is one of the most pronounced effects of the federal reserve’s campaign to curb inflation by lifting the cost of borrowing for consumers and businesses and crushing demand for all levered purchases the truth is that higher interest rates predominantly hurt low and middle-income americans while the wealthy can still afford to purchase homes because many of them don’t even need mortgages they can just buy them with cash but for the rest of us aggressive rate hikes make a world of difference each and every increase adds hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment slowing what was a red hot market not so long ago since the start of the year the average mortgage payment has surged five percent to two thousand three hundred and six dollars from about one thousand seven hundred dollars just back in january with mortgages weighing even more on already expensive home prices mortgage demand is drying up really fast right now numbers released by the mortgage bankers association showed that the number of applications plunged by nearly 30 percent compared to a year ago and the number of applications to refinance mortgages has fallen off a cliff with refinancing activity collapsing over 80 percent mba revealed in the new report refinancings in particular have slowed down because higher rates erode the benefit for most homeowners with rates essentially double where they were a year ago applications for home loans have dropped applications to refinance into a lower payment down 83 percent from a year ago researchers noted today only 452 000 homeowners in the entire country would be good candidates for refinancing that lowers their rate by at least 0.75 percentage points according to an analysis by black knight that is down from a peak of over 19 million in 2020 in september 2021 mortgage originations topped 4.4 trillion dollars but this year they’re expected to be cut by half of that amount the association forecasted higher rates have contributed to more home buyers staying on the sidelines explained joe can mba’s associate vice president of economic and industry forecasting with real median household incomes remaining relatively unchanged many first-time home buyers are finding the door to home ownership is closed for this season he added can also noted that with borrowing costs said to continue rising in the next few months it’s becoming increasingly clear that home prices need to decline to bring balance back to housing markets he said many sellers are recognizing the shift in market conditions and are responding by cutting their asking prices the boom that led to record profits for the real estate sector for the past couple years is turning into a painful burst for everyone currently involved in real estate the chief economist at redfin daryl fairweather says that the ongoing meltdown is the deepest since the previous crash she outlined in the recent interview this is the sharpest turn in the housing market since the housing market crash in 2008.

we haven’t seen interest rates this high since 2008 2007. so it is a big change from the housing market we’ve all gotten used to buyers just don’t have the 40 extra money to put towards housing every month fair weather continued a lot of home buyers had to drop out go to the rental market instead or choose not to buy that second home or investment property redfin exposed that larger cities such as san francisco and los angeles are seeing the greatest repercussions from this when you’re talking about a 1.

5 million dollar home that’s an extra thousand dollars a month towards a mortgage payment she added at this point an estimated 39 million would be buyers are being forced to continue renting at the same time more than 1 in 10 renters across the country are behind on rent according to new research by the harvard joint center for housing studies over the past year median rent prices surged by almost 25 now standing at an eye watering 1 879 per month and while housing costs continue rising wages are not keeping pace median weekly earnings for both men and women in the second quarter of 2022 were 1045 dollars per week according to the bureau of labor statistics before taxes that’s about four thousand five hundred twenty eight dollars of income per month which means that households bringing in that amount would pay more than 41 percent of their income on rent alone typically those who spend more than 30 percent of their income on housing are considered cost burdened meaning those households may struggle to afford necessities such as food and transportation on top of that as fair weather mentioned if we do enter another recession millions of home buyers would need to consider if they’ll still be able to afford their home if they unexpectedly lose their job billionaire barry sternlicht is even more pessimistic he says and we can all feel this that a serious recession is already here and he believes the fed’s policies will only make things worse from this point on the economy is breaking hard the chairman and ceo of starwood capital group stressed the continuation of rate hikes will also cause a major crash in the housing market stern like predicted if the fed keeps this up the way they’re going people will lose their jobs consumer confidence is terrible ceo confidence is miserable sternlick said you’re gonna see cracks everywhere with a series of unresolved supply chain issues and inventories now backing up in warehouses companies are set to face acute profit losses which will only deepen this imminent crisis sadly stern leaks predictions are right on target even if the central banks stopped hiking rates and left things where they were we would still have a real nightmare on our hands but there are no indications that officials are gonna stop we’re actually being warned that august’s higher than expected cpi rating could potentially result in the highest rate hike in 40 years the latest inflation number was one of the last shoes to drop before the fed announcement on september 21st and it arrived at the time where the market had fully priced in a 75 bp hike but was willing to consider something even higher if the data was convincing wrote matthew graham chief operating officer of mortgage news daily this was arguably convincing enough for the fed to at least open the conversation it goes without saying that this is going to really shape things up across financial markets in this final quarter fed officials have repeatedly told us they’re going to keep raising rates until inflation is under control and that’s definitely not a month’s long process it can actually take years so what can we do to effectively protect ourselves if you’re selling a home we would recommend trying to sell it as fast as you can while home prices are still ridiculously high but if you’re looking to buy a home it would be wise to wait until home prices come down quite a bit and something that we can all do is to get ready for the serious recession the billionaire barry sternlicht is warning about during the financial crisis tens of millions of americans lost their jobs overnight after losing their incomes all of those people suddenly lost their ability to pay their monthly bills and many formerly middle class americans ended up losing their homes of course we don’t want to suffer the same fate now more than ever it’s time to build a reliable emergency fund that will allow you to continue paying your bills no matter what comes along you’ll also be less vulnerable to facing eviction or losing your home it’s also important not to take on any additional debt when hard times come it’s better to keep your finances as lean and mean as possible now is the time to focus and batten down the hatches financially we have to remind ourselves that very rough weather is headed our way and a number of crises may simultaneously burst this winter the wise will prepare in advance but those that are foolish will do nothing because they still believe that our leaders have everything under control thank you for watching if you enjoy our content we strongly recommend seven year apocalypse the latest book by the economist and financial expert michael snyder in the meantime don’t forget to hit the bell to always get our notifications and to share this message with friends and family

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