Sky-high housing prices still threaten to complicate the Federal Reserve’s inflation fight

 Borrowers already took out trillions worth of low-cost, 30-year fixed-rate mortgage debt in recent years, leaving only about 10% of the $12.8 trillion mortgage market at adjustable rates, according to the Urban Institute.

That’s good for existing homeowners, since it dulls the kind of interest-rate shocks that sparked a wave of subprime mortgage defaults from 2007 to 2009, causing home prices to plunge and exposing reckless leverage in financial markets that spiraled into a global crisis.

MarketWatch 10 August 2022

https://www.marketwatch.com/story/why-home-prices-can-stay-high-complicating-the-feds-battle-against-inflation-11660170245


U.S. Home Prices  Record High in Second Quarter

Median prices rose by double digits from a year earlier in 80% of 185 metro areas

The average rate on a 30-year fixed-rate mortgage was 5.22% this week
That is off the 13-year high of 5.81% in June well above the 2.87% rate a year earlier.

WSJ 11 August 2022




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