https://twitter.com/theyhatemetoo/status/1690114764704481281
Homebuyers spend 40% of income on mortgage, exceeding 2008 high.
Homeowners are now spending a record 40% of their gross income on their mortgage.
This is ABOVE the 2008 high of 39% and up sharply over the last 2 years.
After paying income taxes and mortgage costs, most homebuyers have less than 30% of their income left.
This is concerning. pic.twitter.com/vnI6MaHhUv
— The Kobeissi Letter (@KobeissiLetter) August 12, 2023
"We can't get $3000/mo in rent so let's list it for a $6,000/mo mortgage payment." pic.twitter.com/NlTJ74Twwm
— Darth Powell (@VladTheInflator) August 12, 2023
Small banks now hold a massive $1.9 TRILLION of commercial real estate (CRE) loans.
This is up nearly $1 trillion since 2017 while large bank exposure stood flat.
CRE is also dealing with mass vacancies and prices are down 20%+ in 1 year.
The worst part?
Over $1.5 trillion… pic.twitter.com/cJ4MLzF1Yc
— The Kobeissi Letter (@KobeissiLetter) August 12, 2023
REAL RATES pic.twitter.com/m6jrtBIO5u
— Win Smart, CFA (@WinfieldSmart) August 12, 2023
Primary drivers of the accelerated decline:
Interest rates, credit availability and affordability.
The 3 of these are continuing to put downward pressure on prices everywhere.
[Data source: Black Book Wholesale Price Index]
— Car Dealership Guy (@GuyDealership) August 12, 2023
Americans Are Being Forced to Dip Into Their 401(K) Retirement Plan Just to Survive
The U.S. economy is under strain as many Americans tap into their retirement funds due to financial distress. With household debt, especially credit card balances, surpassing $1 trillion, concerns are rising about a potential slump in consumer spending. Bank of America’s recent report reveals a 36% surge in “hardship distributions” from 401(k) plans compared to last year, indicating a troubling financial landscape for many.
h/t Simian_Stacker