1. Adjusting for inflation, home prices are up 118% since 1965, while median household income has increased by just 15%.
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— The Kobeissi Letter (@KobeissiLetter) August 21, 2023
Worrying Sign Not Seen Since the Great Recession: Mortgage Rates Could Hit 8%
Mortgage rates exceeding 7% are straining the U.S. housing market with potential to hit 8%. Lawrence Yun of the National Association of Realtors highlights the 30-year rate’s precarious position. If the Federal Reserve hikes interest rates again and the 10-year Treasury note continues rising, an 8% mortgage rate could become imminent. Such a surge threatens to stagnate the housing market, potentially driving down sales and home prices, especially if employment falters.
3. ~90% of major metros have a price to income ratio above the maximum recommended ratio of 2.6x.
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— The Kobeissi Letter (@KobeissiLetter) August 21, 2023
5. Only 6 of the 50 most populated US metros have a price-to-income ratio within the maximum recommended ratio of 2.6:
1. Pittsburgh: 2.2
2. Cleveland: 2.4
3. Oklahoma City: 2.5
4. St. Louis: 2.5
5. Birmingham, AL: 2.5
6. Cincinnati: 2.6Would you live in any of these?
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— The Kobeissi Letter (@KobeissiLetter) August 21, 2023
The Fed WILL break this housing market
Make no mistake
Y’all had a whole extra year of lag adjustments + slow draining liquidity to sell and take profits
I hope you did pic.twitter.com/GctJXZmz5f
— Amy Nixon (@texasrunnerDFW) August 21, 2023