Wells Fargo: A Housing Market Recession Is Coming
Published: 2023-11-25
Status:
Available
|
Analyzed
Published: 2023-11-25
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Wells Fargo predicts a recession in the housing market due to high mortgage rates.
"Wells Fargo just put out a warning saying that they believe a recession is coming to the housing market because of the higher mortgage rates"
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Bank of America anticipates increased turbulence in the housing market.
"Bank of America also in October put out a statement saying that they believe that there's going to be more turbulence coming to the housing market"
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Mortgage rates reached approximately 13.3% in 1980.
"this led to in the early 1980s or 1980 mortgage rat shooting up to around 133%"
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Mortgage rates were close to 17.7% in 1982.
"by the time we were in 1982 in the United States mortgage rates were now at close to around 177%"
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High mortgage rates in 1980 reduced housing demand, giving buyers an advantage over sellers.
"the high mortgage rates have dampened demand for houses at the moment giving buyers a small Edge over sellers for the first time in years"
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Sellers in 1980 were advised to wait until May or June for mortgage rates to decrease and pent-up demand to drive prices up.
"a seller should hold off until May or June again this is 1980 by then mortgage rates should come down a little and then after that pent up demand will drive prices back up"
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Mortgage rates fell to approximately 13.3% in 1985.
"it wasn't until 1985 that mortgage rates fell to around 133%"
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Mortgage rates decreased to around 10% by 1990.
"it wasn't until the year 1990 that mortgage rates fell down to around 10%"
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The cost of homeownership has increased at a faster rate than wages.
"the cost to own a home has risen significantly faster than wages"
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Housing affordability is negatively impacted by high home prices and rapidly rising mortgage rates.
"housing affordability has really been getting hurt because not only are home prices still very high and in some neighborhoods still Rising but also more AG rates have been rising very quickly"
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Higher mortgage rates are currently leading to a cooling down of demand in the housing market.
"we are seeing higher mortgage rates today today we are seeing demand start to cool down"
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Higher mortgage rates can increase negotiating power for home buyers.
"higher mortgage rates can actually give you more negotiating room as a buyer"
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In the 1980s, buyers were sometimes able to negotiate 10% off the asking price for homes.
"buyers were able to negotiate sometimes 10% off of asking price"
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U.S. incomes would need to increase by 55% for home buying to become affordable.
"the US housing market has gotten so expensive that incomes would have to jump 55% to make buying a home affordable"
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The US is currently facing one of the least affordable housing markets in history.
"America is currently experiencing one of the least affordable housing markets of all time"
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