Mortgage requirement is nearly half of what it was obviously a year ago and rent increases are slowing down because consumers hit their busting point.
Mortgage interest rates are well over 7%, after starting the year at a little over 3% – and landlords are also noticing a cool down in the rental market.
To put it in viewpoint, a $400k house bought at a 3. 25% interest rate earlier this year would have a mortgage payment of around $1750, but the same house would cost nearly $2800 a month at this point with a 7. 5% rate of interest, an increase of over $1000.
“ Higher interest rates are also weighing upon home prices, ” CNBC reported .
“ While prices are still higher than they were a year ago, the gains are today slowing at a record speed. ”
“ Homebuyers are also reconsidering their own purchases. ”
Interest rates are so high that there are less than 150, 000 borrowers who would benefit from refinancing, out of the millions of homeowners in the country.
Additionally , rent increases are starting to slow down in many parts of the US.
“ It’s a dramatic reversal from just months ago, when people were fighting over a limited supply of apartments, making waiting lists or having to pay multiple application fees to land one home, ” reports Bloomberg. “ Now, particularly in pandemic increase markets such as Las Vegas and Phoenix, the application piles have thinned out and listings are lingering longer. ”
In short, if people don’t have the money, they will not have the money, so it’s not surprising that vacant units are seated longer on the market.
The US is entering an additional period of ‘ stagflation’ by which inflation, caused by excessive cash printing, is combined with the stagnant economy.
“ Once money is created out of ‘ thin air’ and employed in the economic climate, it sets in motion an exchange of nothing for something. This amounts to a diversion of real wealth from wealth generators to the holders of newly created money, ” wrote the particular Mises Institute. “ Along the way genuine wealth generators are usually left with fewer assets at their disposal, which in turn weakens the particular wealth generators’ ability to grow the economy. ”
“ So as opposed to alternative theories, money cannot grow the economy during the short run. On the contrary, an increase in money only undermines real economic growth. ”