July 13, 2024

Home Prices and Federal Reserve

Sure seems like the Federal Reserve wants to engineer a situation where people are forced to sell their homes because of job loss. And sell those home at lower prices because of the higher interest rates!

Jerome H. Powell said it months ago that the “real estate market needs a reset” and “job market will see some pain”. Those words came straight from the guy who decides the direction of monetary policy…I’m not betting against it!

Home Prices and Federal Reserve

Highest home mortgage in 21 Years! Homebuying demand just fell off a cliff, dropping to the lowest pre-COVID levels since May 1995 (a 28yr low excluding late-February 2023 when looking at the MBA’s purchase index which is a measure of the amount of purchase loan applications in the US

Home Prices and Federal Reserve - home mortgage rates top 7%
home mortgage rates top 7%

The US economy is heading for a cliff, heading toward an inevitable hard landing in the coming months. With catalyst after catalyst lining up toward the end of 2023. Now with the latest Federal Reserve’s FOMC meeting minutes being released, in this video, we get a behind the scenes look at what the FOMC members are thinking and considering for future monetary policy. Where they believe the economy is headed, and what pain points currently exist in the near term.

Look at this chart below, about United States Bankruptcy rates.  Currently in 2023 it looks like we are already over the total number of bankruptcy filings for the full year of 2022!

What do you think higher interest rates are going to do to this bankruptcy rate through the end of the year?

Home Prices and Federal Reserve

According to Epiq’s data, total bankruptcy filings nationwide in the first six months of this year, were up 17% from the same period last year.

Many people with 401ks have been happy about their accounts recovering as a stock market has pushed up.  But, just a word of caution here, just yesterday, some major stock market technical support levels were broken.

Today, it looks like many big stock market darlings in technology and banking,  are seeing their stock market prices really head south in a huge way.  Sure, this could just be a minor blip, but when you look at the total economic picture,  personally, I’d be very cautious at juncture with all my investments.  Perhaps this is a good time to meet with your financial advisor just to be sure that your stock and bond market allocations are well diversified.

So, how do you think  Bidenomics has been working?

Yes, elections have consequences!  So, if you believe the White House saying that the worst in the economy is over, I certainly hope you’re right,  but, I’m pretty sure that well before the end of this year, you’re going to wake up to a much smaller 401k and a home that is substantially worth less than its current value.

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    Some of the links in this description and in our videos may be affiliate links, and pay a small commission if you use them, but never increase the basic cost. I really appreciate the support. The content in my Youtube videos SHALL NOT be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other & may be outdated or inaccurate; it is your responsibility to verify all information. I am a not financial adviser. I only express my opinions based on my experiences. Your experience may be quite different. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. You must conduct your own research. There is NO guarantee of gains or losses on any investments. My produced videos are for entertainment purposes ONLY. DO NOT make buying or selling decisions based on these videos. If you need advice, please contact a qualified CPA, attorney, insurance agent, contractor/electrician/engineer, financial advisor, or the appropriate professional for the subject you would like help with.

 

 

Home Prices and Federal Reserve