This article was originally published by Michael Snyder at The Economic Collapse Blog.
If you are trying to sell your home right now, I feel so sorry for you. Thanks to the Federal Reserve, mortgage rates have risen to very alarming levels, and this has scared millions of potential homebuyers out of the market.
Compared to two years ago, the average potential homebuyer is facing mortgage payments that are close to $1,000 per month higher. I don’t know about you, but I certainly wouldn’t want to pay $1,000 more each month for the exact same house. So most potential homebuyers are staying out of the market until interest rates come down, and that could be a while because officials at the Fed do not plan to reduce rates for the foreseeable future.
On Thursday, we learned that sales of pre-owned homes fell 3.3 percent last month. Overall, they have now dropped to the lowest level that we have seen during the month of June since 2009…
Sales of pre-owned homes dropped 3.3% in June compared with May, running at a seasonally adjusted annualized rate of 4.16 million units, according to the National Association of Realtors.
Compared with June of last year, sales were 18.9% lower. That is the slowest sales pace for June since 2009.
In June 2009, we were right in the middle of Housing Crash 1.
Now Housing Crash 2 is here. Over the first six months of this year, only about one percent of all pre-existing homes in the U.S. changed hands…
House sales have reached their lowest level in over a decade, with only one percent of properties changing hands in the first half of the year.
Fresh analysis by real estate brokerage RedFin shows that just 14 out of every 1,000 homes across the US were sold in the last six months.
If you are planning to purchase a home, it is going to cost you a lot more than it would have a few years ago.
As I noted above, average homebuyers are now facing potential mortgage payments that are extremely high thanks to soaring interest rates…
An average homebuyer is now facing mortgage payments nearly $1,000 per month more expensive than two years ago as interest rates hover around 7 percent.
As a result households report feeling ‘locked into’ their current property due to their cheap deals. Last week, Dailymail.com revealed there has been a surge of ‘accidental landlords’ as owners are opting to rent out their homes rather than sell.
If you work in real estate, this is going to be a really tough time for you.
And I am not just talking about residential real estate.
As I keep warning my readers, we have entered the worst commercial real estate crisis in U.S. history, and prices are absolutely plummeting all over the nation…
On Tuesday, we asked: Is this the start of a commercial real estate firesale in crime-ridden Baltimore City?
And to our surprise, it appears so.
Let’s begin with our report on Tuesday when The Baltimore Sun revealed a 30-story office tower at One South Street in downtown Baltimore that was sold in June for $24 million, a 63.6% discount versus the tower’s 2015 sale of $66 million.
This is already happening even though we haven’t even “officially” entered a recession yet.
But a recession is certainly coming.
For the very first time since 2007 and 2008, the Conference Board’s index of leading economic indicators has fallen for 15 months in a row…
“The Leading Index has been in decline for fifteen months—the longest streak of consecutive decreases since 2007-08, during the runup to the Great Recession. Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead. We forecast that the US economy is likely to be in recession from Q3 2023 to Q1 2024. Elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending are poised to dampen economic growth further,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.
That is not good news at all.
And it is being reported that the overall rejection rate for credit applicants has just skyrocketed “to its highest level since June 2018″…
The New York Fed reported that the overall rejection rate for credit applicants rose to its highest level since June 2018, standing at 21.8 percent, a jump from 17.3 percent in February.
Researchers noted that the rise in the application rejection rate “was broad-based across age groups and highest among those with credit scores below 680.”
Do you remember when I warned you that a credit crunch was coming?
Well, it is here.
And it is going to get a lot worse.
Credit conditions are tightening for businesses too, and we are starting to see default rates and bankruptcies spike…
That’s starting to happen already, with more than 120 big bankruptcies in the US alone already this year. Even so, less than 15% of the nearly $600 billion of debt trading at distressed levels globally have actually defaulted, the data show. That means companies that owe more than half-a-trillion dollars may be unable to repay it — or at least struggle to do so.
This week, Moody’s Investors Service said the default rate for speculative-grade companies worldwide is expected to hit 5.1% next year, up from 3.8% in the 12 months ended in June. Under the most pessimistic scenario, it could jump as high as 13.7% — exceeding the level reached during the 2008-2009 credit crash.
The trends are very clear.
Everyone should be able to see what is coming.
The short-term outlook is horrible, and the long-term outlook is even worse.
But many Americans will just continue to believe the talking heads on television that are assuring them that everything will be just fine.
For example, Jim Cramer of CNBC says that he is bullish “on the economy in general and the entire human race”.
And when you consider his track record, you have got to believe that very “interesting” times are just around the corner.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to the new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible. I have also started a brand new Substack newsletter, and I encourage you to subscribe so that you won’t miss any of my articles. I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions. I encourage you to follow me on social media on Facebook and Twitter, and anyway that you can share these articles with others is definitely a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.
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