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What Happens If the Fed Takes Its Thumb Off the Housing Market?

We talk a lot about how the Fed keeps its big fat thumb on the Treasury market. But it also has its big fat thumb on the housing market. And if the Fed really does follow through with its taper and its plans to shrink its balance sheet, it will have a big effect on the housing market.If you’ve ever held something under tension down with your thumb and suddenly release it, you know what happens.Pop!As of October 2021, housing prices had skyrocketed over 18% year-on-year. Housing prices are...

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Is There a New Housing Bubble, and What Should Be Done About It?

with Peter van Doren U.S. house prices surged in 2020, rising 11.2 percent for major metropolitan areas according to the Case–Shiller Home Price Index and 12 percent according to the Federal Housing Finance Agency. This has raised concern that a new housing bubble has formed and is threatening a repeat of the “Great Recession” of early this century. If “housing bubble” means that home prices rise in a relatively short time and then fall back to long-term trend, then...

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Mortgage Delinquencies Soar

Last week we reported on a looming wave of evictions on the horizon as the economic consequences of the coronavirus-induced government economic shutdowns begin to rear their ugly heads. Now for more gloomy news, there are also signs of trouble in the mortgage markets.Mortgage delinquencies soared at a record pace in April. And that was toward the beginning of the pandemic’s economic impact.According to property data and analytics company CoreLogic, the share of all mortgages that were past...

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Gold Crosses $1,750….

A Pfennig For Your Thoughts June 23, 2020 * Currencies rebound on Monday!  * Chuck explains that the stock market is NOT the economy…  Good Day… And a Tom Terrific Tuesday to you! Last night they replayed Game 1 of the 1968 World Series, in which Bob Gibson set the World Series record for strikeouts in a game, at 17… I recalled watching the game somewhat in school, on a TV that they rolled into the room. The game was in black and white, which still puzzles me, because color TV was around...

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The Credit Risks Hiding Behind the Averages (Video)

As we reported last week, consumer debt continues to break records month after month. Americans owe over $4.3 trillion dollars in revolving debt (primarily credit cards), student loans and auto loans. When you factor in mortgages, the number climbs to $13.54 trillion. That figure was $869 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008 (right before the crash) and 21.4% above the post-financial-crisis trough reached in the second quarter of 2013.But...

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Is the Air Coming Out of Housing Bubble 2.0?

Peter Schiff put it pretty bluntly in a podcast last week. We don’t have a booming economy. We have bubbles. And it looks like the air is starting to come out of some of those bubbles. We see signs of trouble, particularly in interest rate-sensitive sectors such as real estate. As just one example, home sales in California have hit the lowest level in a decade. And it’s not just California. We’re seeing declines in many of the “most splendid housing bubbles” in America. Even more troubling...

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Mortgage Lenders Loosening Credit Standards as Home Prices Spiral Upward

Remember back when mortgage lenders loosened credit standards making it easier to get a loan and blew up a giant housing bubble?That’s happening again.According to a report released by Fannie Mae, lenders facing lower profit margins are trying to expand the borrower pool.Facing constrained mortgage demand and a negative profit margin outlook, more lenders say they have eased rather than tightened home mortgage credit standards, according to Fannie Mae’s third quarter 2017 Mortgage Lender...

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US Household Debt at Record Levels Not Seen Since 2008 Crisis

American household debt hit an all-time high in the second quarter of 2017, with increases in every major category, from credit cards, to student loans, to mortgages.According to the latest quarterly household debt and credit report by the Federal Reserve Bank of New York, aggregate household debt increased for the 12th consecutive quarter. It now sits at $12.84 trillion, a level $164 billion higher than the previous peak of $12.68 trillion set in the third quarter of 2008. The level of...

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Shadow Banks, No-Down-Payment Subprime Mortgages in Canada’s House Price Bubble

So no “major, major collapse in housing?” By Angela Johnson, Vancouver, Canada, for WOLFSTREET.com: “The pundits have been raising red flags on the Canadian housing market for more than five years – and have been consistently wrong,” former Royal Bank of Canada CEO Gord Nixon told BNN today, in response to the federal government’s new mortgage rules designed to tamp down on risk in the housing market: “I appreciate why policymakers have been moving in the direction they have been...

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Spanish Banks Brace for Ultimate Showdown

“Very serious threat … to Spain’s entire mortgage market”: Moody’s By Don Quijones, Spain & Mexico, editor at WOLF STREET. A bitter, long-simmering conflict finally appears to be reaching its finale in Spain. On one side of the divide are the country’s biggest banks and some of the world’s largest investment funds; on the other are hundreds of thousands of families who lost their homes after the collapse of one of Europe’s biggest ever housing bubbles, together with the many thousands...

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