Homes Prices AND Mortgage Rates are now Collapsing at the same time. Making the 2022 Housing Market a lot Cheaper (Housing Deflation is HERE).
The combination of declining Home Prices and Mortgage Rates mean home buyers are having to pay a lot less in monthly payments (check Zillow). And that the 2022 Housing Crash is getting Worse (especially in Dallas and Phoenix). But why are Mortgage Rates declining so fast?
After all, Jerome Powell and the Federal Reserve just did a Triple Rate Hike to fight Inflation, and will likely do more rate hikes into the future. But despite these rate hikes, Bond Yields are plummeting, which is pushing Mortgage Rates down. The result is an inverted yield curve that predicts the Recession is going to get worse.
Despite the improvement in affordability, these declining Prices and Mortgage Rates still haven’t gone down enough. That’s homebuyers in metros like Phoenix, Dallas, and Denver are still significantly cost-burdened. Even more so than the 2007 Housing Bubble. That means the Housing Crash will likely continue in these markets until prices get cheap enough.
On the other end of the spectrum are metros like Washington DC, Virginia Beach, and St. Louis – where the cost of buying a home is still relatively affordable. These markets will have a correction, but are unlikely to have a crash.
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