We already exceeded the worst year of the 2008 banking crisis. And its only May…
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What do you think this means for the housing market and mortgages?
https://kotakuinaction2.win/p/15Hbytp8ra/the-mortgage-industry-is-dead-th/c/
The mortgage industry is already dead. There's already tons of business closing, and there's continuing to be large layoffs. On top of that, there's going to be higher unemployment... which means higher mortgage defaults. Then on top of that, there's higher credit card debt.
Straight up: no one agrees with me on this, but I fear that the enormous debts may cause people to start selling their homes for liquidity. If people start selling their homes, a lot of those homes may start pouring onto the market, which could trigger a cascade failure of prices. If some housing prices start to come down because regular people need the cash, the investment banks that have been holding onto properties might start selling to other property owning corporations, who might start creating sell-offs to deal with dropping prices. I think the housing market is in a bubble that might implode.
The reason no one agrees with me is because there's so much pent-up demand for housing that people expect that even if there is a glut of houses on the market, people will snap it up. But I get the feeling that some people might decide to wait until the prices come down (since many are already unaffordable). It's not going to happen now, but it sure as hell looks like housing is in trouble.
Not to mention, Yellen got pranked with a fake call, and claimed she'd be okay with upping interest rates twice more. Those adjustable rate mortgages are going to look very ugly.
I personally think they will crash, but to what extent I am unsure. It also relies on what the government does in response to these markets going downward.
The recent actions by the government, by punishing people with good credit and rewarding those with bad, will probably act to somewhat "cushion" the crashes fall....at the expense of economic stability in its entirety (and also doing nothing to actually really solve the problem with the houses being too unaffordable to begin with, meaning the issue will absolutely show up again and probably as fast as it did from the 2008 crash, if not even faster).