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The Housing Slowdown Could Become a Global Meltdown

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The Housing Slowdown Could Become a Global Meltdown

All around the world, hundreds of millions of prospective home buyers that have been unable to purchase a home because of stratospheric price increases seen over the past couple of years are now getting thrilled about the ongoing housing market correction. But experts are warning that they should be careful about what they wish for: bubbly housing prices, soaring mortgage rates, the imbalance between supply and demand, and affordability problems are a toxic combination that has the potential to turn a global housing slowdown into a global economic meltdown of devastating proportions.
Over the past couple of years, central banks from around the world have artificially suppressed interest rates in response to the health crisis, in an attempt to prevent a global economic collapse. But now industry specialists are arguing that policymakers have only managed to delay that downturn, and as conditions start to shift in the markets, with central bankers now hiking rates at a more aggressive pace, a major economic disaster that will shake the entire globe is looming. 
The situation has been particularly dire in U.S. markets, where home prices have climbed over 20% in the past year alone, and the vast majority of local markets remain extremely overvalued at this point. According to Ian Shepherdson, a chief economist at Pantheon Macroeconomics, this means that property values are about to see a double-digit price crash because of slower demand caused by rising mortgage rates.
Unfortunately, even with sellers slashing prices at the fastest pace since 2008, potential home buyers will continue to suffer from affordability issues. That’s because mortgage rates are expected to keep reaching new highs compromising first-time buyers’ ability to purchase a home.  According to a recent New York Federal Reserve housing survey, 30-year mortgage rates are expected to rise to 6.7% before the end of the year and reach 8.2% in 2023.
Needless to say, that’s a very concerning outlook. To make things worse, the U.S. is not alone. Similar imbalances are occurring in several markets all over the world at a time the global economy has started to falter. In the last 24 months, central bankers from all around the globe have enabled the formation of a massive real estate bubble, and now they’re having to cope with the consequences of the bubble going bust. In China, a sweeping real estate crash has already begun. Chinese banks are under orders to bail out property developers so they can complete unfinished projects. Mortgage boycotts are on the rise because people are getting increasingly frustrated about paying home loans for properties they are unable to occupy.
The toxic combination for the housing market is rising interest rates, collapsing growth, and higher unemployment. Of those, only the last is missing, but if the economic conditions turn out to be as grim as policymakers expect, then it is only a matter of time before mass lay-offs start happening again. A recent forecast published by the International Monetary Fund noted that all three main growth engines – the US, China, and the eurozone – were stalling, the fund said: “risks were heavily skewed to the downside”.
We’ve been here before, and we’ve seen things getting really ugly really fast. The stakes have never been higher. The ongoing real estate market crash is pushing us closer and closer to a global economic meltdown – and it’s safe to say that’s only a matter of time before things spiral out of control.

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38 COMMENTS

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  2. 3.42% % of Shares Held by All Insider

    90.44% % of Shares Held by Institutions

    93.64% % of Float Held by Institutions

    318 Number of Institutions Holding Shares

    Be careful of the manipulation from these CEOs if they are bullish or bearish. Remember they are speaking for their major shareholders: Vangaurd, W.E.F. Blackrock etc

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  18. The whole economy collapsed in 2008? Really? Who gives a crap actually my parents bought their house it was a double digit rate at that time back in the 70's so the fear mongering over 6 or 7 percent is laughable to me. Inflation is the man manufactured greed by all players involved monopoly money being traded for more monopoly money. What a joke it all is.

  19. I personally cleared $230k of debt going aggressive in the other markets. Right now the markets are crazy but there are still hidden opportunities therein. Having monitored my portfolio performance return huge six figures from the last 2 quarters of last year, I have learned why the market will remain a money den for those who know where to look.

  22. Personally, I would love to tell you The Truth from The Holy Bible about what is going on. However, I politely encourage you to read it for yourselves. By The Way, check out Truthunedited and Stephan Darby's sermons to get a deeper understanding for The Life. May Yah bless you and HALLELUYAH!

  24. The stupid rise in interest rates is both greedy AF and unrealistic. People can’t afford food. Much less a slightly less cost house. The interest rate will make the house more expensive before it was a month ago

  30. What is going to happen with the real estate market after the leases for these large office buildings run out? Aren't most companies choosing to have their workers work remotely from home now? Why or why not?

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