The Next Housing Market Crash (Worse Than 2008)
Published: 2023-04-24
Status:
Available
|
Analyzed
Published: 2023-04-24
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
JP Morgan predicts the US debt ceiling and federal funding bill debate will reach critical deadlines in May.
"JP Morgan believes that the debt ceiling is going to become an issue as early as May and that the debate over both the ceiling and the federal funding bill would run dangerously close to final deadlines as a result."
Pending
Surging treasury bills indicate an increased, albeit small, risk of the US missing debt deadlines, which would be disastrous.
"Treasury bills which are essentially loans to the US government are surging signaling a higher risk that there's a very very small chance that they can't agree on time and miss one of their debt deadlines which would be disastrous."
Pending
A US debt limit breach would result in the first-ever default, causing global financial chaos.
"breaching the debt limit would lead to a first ever default for the United States creating Financial chaos in the global economy."
Pending
The market currently estimates a 2% chance of US debt default, the highest recorded.
"today the market believes that there is a two percent chance of them not agreeing and defaulting on their debt which unfortunately is the highest it's ever been."
Pending
The speaker predicts that US politicians will push negotiations to the brink of default without actually defaulting.
"I have a feeling they're going to get as close as possible to actually defaulting without actually defaulting because that would be the equivalent of burning everything down for the sake of not letting the other person win."
Pending
Following an agreement on a new debt ceiling, it is likely that the issue will be postponed, becoming a problem for future generations.
"once they agree on a new debt ceiling chances are they're going to keep pushing the can further and further down the road until eventually it's another generation's problem and we don't have to think about it."
Pending
Beginning May 1st, a new rule will increase mortgage rates and fees for buyers with good credit to subsidize buyers with riskier credit.
"starting May 1st things are about to get a lot more expensive if you have a good credit score let me explain a few days ago a controversial rule was announced that would force home buyers with good credit scores to pay higher mortgage rates and fees to subsidize those with riskier credit ratings who are also buying houses."
Pending
Effective May 1st, borrowers with a 640 credit score will see their fee decrease from 2.75% to 1.5%, while those with a 750 credit score will see their fee increase from 0.25% to 0.375%.
"if you have a 640 credit score and put 25 down you'd previously have to pay a fee of 2.75 percent now that same borrower will only have to pay a one and a half percent fee on the other hand if you have a 750 credit score and put 25 down you used to be charged to 0.25 fee and now you're going to have to pay a point three seven five percent fee."
Pending
The housing market will be challenging in 2023 due to historically fast-rising mortgage rates, which are now comparable to the early 2000s but with significantly higher home prices.
"this year is likely to be challenging for four main reasons number one is going to be interest rates as you can see mortgage rates have risen at their fastest Pace in history and we're currently hovering around the same rates that we saw back in the early to mid 2000s except unlike 20 years ago home prices are no longer a hundred and eighty seven thousand dollars instead they're four hundred thousand dollars."
Pending
A significant majority (71%) of homeowners and renters are unwilling to accept mortgage rates above 5.5%, while current rates are at 6.3%.
"71 of homeowners and renters say that they will not accept the mortgage rate above five and a half percent and as I'm sure you've seen right now we're at 6.3 percent."
Pending
Financial strain is increasing, with 61% of Americans projected to deplete emergency savings by year-end and nearly 70% saving less due to inflation, reducing funds available for home purchases.
"the second people have less money a recent survey found that 61 of Americans will run out of emergency savings by the end of the year and the majority have little to no retirement savings at all in addition to that almost 70 of those surveys said that they're now saving less money because of inflation which basically means less money to spend than a home."
Pending
Layoffs have surged fivefold, particularly in the tech sector, and jobless claims are increasing, indicating a worsening employment situation which impacts the housing market.
"a third we have Rising layoffs yes things aren't bad enough layoffs have increased five-fold with tech companies leading the way on top of that jobless claims are also Rising with fewer people employed."
Pending
Despite falling prices, housing inventory is declining as buyers acquire available properties. Active listings have been decreasing since 2007 due to homeowners being reluctant to sell and give up low mortgage rates.
"and fourth we have inventory surprisingly housing inventory actually declined month over month with Buyers beginning to snatch up whatever's left on the market and since 2007 active listings have been on a steady downtrend as people lock in rates and then refuse to sell keeping prices from falling further."
Pending
The median US home sale price dropped 3.3% in March to $400,000, marking the largest year-over-year decline since 2012.
"Redfin just reported that the median U.S home sales price fell 3.3 percent march to four hundred thousand dollars which was the largest year-over-year decline since 2012."
Pending
Specific cities are experiencing significant home price declines: Boise, ID (-15.4%), Austin, TX (-13.7%), Sacramento, CA (-11.9%), and Oakland, CA (-9.7%).
"Boise Idaho has fallen 15.4 percent Austin Texas is down 13.7 percent Sacramento is down 11.9 percent and Oakland is down 9.7."
Pending
Pending home sales are universally down, indicating fewer buyer offers and forcing sellers to lower prices to make sales.
"pending home sales also happen to be down across the board throughout the entire country meaning buyers are making fewer offers which is resulting in sellers having to readjust their price if they're expected to make a sale."
Pending
In March, 28% of US homes sold above their final list price, a significant decrease from 54% a year prior.
"28 of U.S homes sold from more than their final list price in March which is down from 54 from a year ago."
Pending
Nearly all homeowners (99%) have mortgage rates below 6%, with most under 4%. This means home prices would need to drop by 40% for monthly payments to match the cost of a new, higher-rate mortgage.
"99 of homeowners have a rate below six percent and the bulk of those are locked in under four percent meaning prices would have to fall by 40 just for the monthly payments to equal the same cost as getting a higher mortgage should that person choose to move."
Pending
Well-priced homes may still attract bidding wars, but a significant change is coming on May 1st, making things more expensive for those with good credit.
"if something is priced well you could still expect a bidding war depending on the location however this is only the very beginning because starting May 1st things are about to get a lot more expensive if you have a good credit score."
Pending