A housing market we should be worrying about – the American one

 Home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade. 

Anyone who thinks that is purely an American matter is kidding themselves. If the US market crashes, it will tip the economy into recession, and that will ripple out across the world. 

If there are losses on mortgages, it will threaten the stability of the financial markets. It will determine what the Federal Reserve will do with interest rates, affecting every country's economy. In 2008, the collapse of the subprime mortgage market triggered a global financial crisis. 

What happens to house prices will make the difference between whether there is a hard or a soft landing. The Fed is trying to engineer by far the hardest trick in the central banking playbook; slowing the economy down, and bringing inflation back under control, but without triggering a full scale recession.

It sounds straightforward enough, but it is very hard to achieve in practice. What happens to the housing market will prove the key to whether it succeeds or fails.

Matthew Lynn Telegraph 26 Fenruary 2023

https://www.telegraph.co.uk/business/2023/02/26/house-price-crash-could-wreck-finances-not-britain/

The US housing market is in chaos – here’s why we should be worried

The average rate of a 30-year fixed-rate mortgage in the US, the most popular length of loan in the country, has doubled in the past year. 

New borrowers paid an average of 2.78pc in July 2021, but this has risen to 5.54pc this month, according to US lender Freddie Mac.

Rachel Mortimer Telegraph 26 July 2023

https://www.telegraph.co.uk/property/buy/us-housing-market-chaos-why-should-worried/