Look no further than the housing market and interest rates specifically. When rates started going up, Realtors, in an effort to keep sales up came up with a catchy phrase, “ Date the rate, Marry the house “. Meaning, buy the house with current high rates and then refi when rates come down. It’s been three years of high rates and , folks, it’s looking like high rates will continue no matter what the lying politicians promised you. Keeping rates this high for this long is cruel and unusual punishment for Buyers.
So “Date the Rate” can easily turn into “ Date the Bankruptcy and Marry the Eviction” all we need is widespread layoffs to start the collapse.
Mortgage rates are now at the highest since May 2024. 7.24% 30 year Fixed. Ouch! The 10 year Treasury yield as of yesterday, 4.75% and inching upwards. ( mortgage rates move with the 10 year yield. )
So, pretty much, mortgage rates have jumped since September when the Fed started cutting rates. WTF.
Existing home sales were crushed in 2024 at an average rate of 6.74% Imagine how bad its going to be with rates in the mid to high 7’s? I’m talking sales volume, prices are going to remain where they are. For prices to drop we need the job market to slow. Yesterday’s kaboom jobs report shows no signs of a slowdown.
Bottom line: If the job numbers are true these rates are staying up because Americans can afford it. Mortgage delinquencies remain at all time lows.
We are going to touch an 8 handle in rates in 2025.
Your local realtor and loan officer need a hug today.
Yesterdays shocking jobs report sent bonds into the tank
Bonds Tanking After Surge in Payroll Growth
a more somber take on the situation
https://www.cryptogon.com/?p=71789