A global house-price slump is coming and it will be scary

C

cancel2 2022

Canceled
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
 
Primavera said:
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
Click to expand...

Congratulation , you are using a credible source of info for a change.

These sources have minimal bias and use very few loaded words (wording that attempts to influence an audience by using appeal to emotion or stereotypes). The reporting is factual and usually sourced. These are the most credible media sources. See all Least Biased sources.

https://mediabiasfactcheck.com/the-economist/
 
At the rate that housing has been appreciating, it's very clear that this is not sustainable, just look back at what happened in the past, ( the S&L crisis, and then the great recession of 2008) for guidance.
 
Primavera said:
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.
Click to expand...


Just pause a moment , maggot- and consider all those people that will be able to afford to buy a home.

Aw, fuck- your walnut profiteer's brain can't manage it !


Haw, haw, haw, haw, haw...........................haw, haw...............................haw.
 
Home prices are at least 25-30% too high. Interest rates are going to have a downward impact on that, as they should. The question for the moron who wrote the OP is..... do you want inflation or not? I guess if it's the value of YOUR HOUSE inflation is pretty hunky dory. Since rents reflected the largest share of inflation last month, this should be good news. You can't have it both ways. If you bought during the pandemic and you are house poor, THAT'S YOUR FUCKING PROBLEM. Been there, done that. Try some fiscal responsibility.
 
Primavera said:
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
Click to expand...

Good, home prices are ridiculous around here.
 
maggot doesn't give a damn about homeless people. His focus is on profits for homeowners.

Most capitalists are sick. maggot is in terminal decline.
 
moon said:
Just pause a moment , maggot- and consider all those people that will be able to afford to buy a home.

Aw, fuck- your walnut profiteer's brain can't manage it !


Haw, haw, haw, haw, haw...........................haw, haw...............................haw.
Click to expand...

none because the reason prices will drop is mortgages will cost more.

thats WHY prices are collapsing.

and rents will soar as well. homeless neighborhoods will be sprouting up everywhere.
 
Celticguy said:
none because the reason prices will drop is mortgages will cost more.

thats WHY prices are collapsing.

and rents will soar as well. homeless neighborhoods will be sprouting up everywhere.
Click to expand...

Rents have already soared. Because investors bought homes at ridiculous prices and are now trying to gouge. What the fuck is it exactly that you want the Fed should do? Instead of whining, why don't you tell us what you see as a solution to inflation. This should be good for a laugh.
 
Primavera said:
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
Click to expand...

We keep hearing about how the rest of the world is doing worse than the USA... To me that sounds like an argument for Biden, not against him.
 
House prices going down is exactly what America NEEDS.

I bought my first house back in 2016, and I was lucky. I'm not looking to move and maybe the cost of building materials can drop a bit as well, so I can build a new back deck in the spring.
 
Primavera said:
.
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
Click to expand...

Bought too much house, eh?
 
Walt said:
If rents are going up, then investors will want to make that money, and will invest in housing. Capital follows return on investment.
Click to expand...

While definitely possible we’ve already seen institutional investors pull back from purchasing. You think that’s changing now?
 
You must log in or register to reply here.
Back
Top