https://www.bloomberg.com/news/articles/2017-08-22/wall-street-banks-warn-winter-is-coming-as-business-cycle-peaks
What goes up, comes down.
It seems to be a GLOBAL thing.
Needs watching closely.
Might wish to buy gold/silver/altcoin :o
Lots of signals out there. Here's a quick cut-n-paste from business news headlines:
Orders for durable goods sink 6.8% in July, the most in nearly three years
US existing home sales unexpectedly fall in July
Mortgage rates plunge to 2017 low
We seem due, unfortunately.
UK's situation is particularly dicey because of Brexit.
Britain heads back to the Brexit table, plans in hand, economy in decline
https://www.reuters.com/article/us-global-economy-outlook-idUSKCN1B512N
I find this fellow to be an extremist economist, but he does a good job of highlighting the macro stuff that's whirling around out there.
http://www.oftwominds.com/blogaug17/recession-inevitable8-17.html
"it will be a devastating meteor storm"
>>Mortgage rates plunge to 2017 low
And sooner or later, those will go up, and when they do, home prices in high-priced, overheated markets, will come tumbling back down
In my neighborhood, homes that should be valued at about $600,000* are currently selling for more like $800,000. An older, run-down house that will need a lot of work in coming years and could be built brand new for $600,000 sold in two days for $850,000 to investors from China. The last time we saw those sky-high prices, they returned to earth with alarming rapidity. One year a house was selling for a $200K premium on cost to build, and a year later they were selling for $200K under the cost to build (short sales and foreclosures... shoulda bought a house, but all cash sales and I didn't have that much cash).
Anyway, an $800K mortgage today at 3.95% is quoting at $3,783 monthly payment. At 5%, the payment goes to $4,295. Or put another way...
If my budget is $3000/mo, I can afford $634,800 at 3.92%, but only $550,000 at 5% interest. Which means that right there, with wages stagnant, $84,800 of my house has to be gone. But if you couple it with an economic downturn and, therefore, fewer buyers, you get some big drops. I don't think you get the follow-on effects you did in 2008, because you have a lot fewer people leveraged to the hilt with ARM. That will be the killer in the housing market though - if interest rates adjust strongly upward and a lot of people have ARMs.
Of course... in hindsight, I wish I had gotten an ARM. I think the house would be paid off by now if I had!
*cost of construction is the killer here - we pay 1.5 hours per day for guys to sit in cars whether framers or concrete delivery. Concrete is about 30% cheaper just an hour down the hill.
And here we go....
This morning, mortgage rates are down... except 30-year fixed, which is up. In other words, lenders are getting nervous about guaranteeing low rates. Rates in general are higher than a year ago though.
http://www.bankrate.com/mortgages/refinancing/rates/refinance-rates-for-saturday-august-26/
https://www.washingtonpost.com/news/where-we-live/wp/2017/08/24/30-year-fixed-mortgage-rate-sinks-to-its-lowest-level-in-nine-months/
PS - "30-year fixed" does mean "30-year loan" - it usually means 6-9 years. As Keith Fears, Director of Regional Economic and other stuff at the National Realtors Association said in 2013
QuoteHistorically the average tenure for a home before resale was 6 years. That figure increased to 9 in recent years due to turmoil in the housing market and the recession.