Real Estate Rolls Over

The housing market has been effectively frozen for three years.

That’s because, following record-low interest rates, homeowners refinanced with mortgages under 3%. Today, standing over 6%, the same home would have more than double the amount of interest each month.

Unsurprisingly, then, home prices have started to weaken as rates have remained high:

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Home prices are falling in most metros amid high rates (Source: Barchart)

With the Federal Reserve shifting towards a more accommodating stance – even with sticky inflation – this downtrend in home markets may not last.

If you already own your home, it’s no big deal either way.

But lower rates could make it easier for buyers to start bidding up properties again when home prices are already at record prices relative to wages.

Think of it as the real estate echo of the terrifying bull market in stocks that rate cuts are likely to kick off.

~ Addison

P.S.: Most assets such as homes should see their prices rise as interest rates come down. We still see upside for stocks, gold, bitcoin – you name it. Not for healthy reasons, but because of the persistent decline in dollar purchasing power.

Grey Swan Live! this week: Mark Jeftovic joins us for “Shadow Fed & the American Dream” — how a September rate cut could hit the dollar’s purchasing power, where the money-market flood might go next, and why “control of money” is migrating from central banks to code, corporates, and courts.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The housing market has been effectively frozen for three years.

Unsurprisingly, then, home prices have started to weaken as rates have remained high:

Turn Your Images On

Home prices are falling in most metros amid high rates (Source: Barchart)

With the Federal Reserve shifting towards a more accommodating stance – even with sticky inflation – this downtrend in home markets may not last.

If you already own your home, it’s no big deal either way.

But lower rates could make it easier for buyers to start bidding up properties again when home prices are already at record prices relative to wages.

Think of it as the real estate echo of the terrifying bull market in stocks that rate cuts are likely to kick off.

~ Addison

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

We’ve been saying for a long time that when it came time to rev up the money printer again, the Fed would do it under some other rubric than “Quantitative Easing” (QE), because by now, everybody knows what that is. YCC? Not so much.

What it means is that the Fed will buy unlimited bonds out at the long end of the yield curve in order to keep yields under some arbitrary line in the sand.

Let’s see, now that the government is shut down, where are we?

Pretty much where we left off: Markets surging higher, backed by the weight of AI capex and gorging on debt; A Congress unable to pay for promises forged in the 20th century’s welfare bureaucracy; A currency bleeding purchasing power with each deficit skirmish; A nation where even butter, coffee, and bandwidth become weapons of policy.

In the first few months of the year, European stocks started outperforming U.S. stocks. There was talk of capital flows out of the U.S., and into Europe.

On the surface, that looked reasonable – a relative value play. But European investors continue to stay invested in the U.S. for one simple reason – it’s where the growth is.

Like me, you can make the choice to put your technological talents to work for the mission of protecting your country.

You are your country’s finest engineers, technologists, and researchers. There is no secret arsenal. There is nobody else. It’s just you. So answer the call. Dare to build. And never yield in the defense of your country and its freedoms.

What it means is that the Fed will buy unlimited bonds out at the long end of the yield curve in order to keep yields under some arbitrary line in the sand.

Let’s see, now that the government is shut down, where are we?

In the first few months of the year, European stocks started outperforming U.S. stocks. There was talk of capital flows out of the U.S., and into Europe.

On the surface, that looked reasonable – a relative value play. But European investors continue to stay invested in the U.S. for one simple reason – it’s where the growth is.

Like me, you can make the choice to put your technological talents to work for the mission of protecting your country.