Housing market and borrowing in the economy, 2023Typically, when rates rise borrowing continues, because income growth in some sectors slows and the consumer responds by borrowing MORE to maintain their standard of living.
Housing is the weakest sector right now. An inherently slowmoving cycle (years to play out, so into 2024 some say).
Homeowners are locked in at really nice rates, so they're not moving, and less people want to buy in because of higher prices/rates, so rent (also a big part of CPI, so contributes to Fed's Tighter for Longer). So they won't be borrowing. Very mean-reverting.
Home prices will fall (eventually forced sellers, those who have to move, with maybe a 10-15% national house depreciation.
https://www.youtube.com/watch?v=tQxOxR-n3_sYet, pending home sales jumped from Dec to Jan 8% (street expecting only 1%). But a more solid indicator, morgage applications, are down.
Singapore: Private retail condo prices falling outside of cities, but in cities still rising.
Property volume, transactions, is down a lot. Instead of 10 viewers, more like 2 viewers. He advises people looking for rental tenants to secure their tenants, because a huge amount of new flats are coming on the market in the coming months and years.
“$1m load payment interest $40k. Who can pay that?” Meanwhile t-bills are paying 5%.
Only thing pushing up prices Chinese coming in. But the Chinese economy isn't doing well, and they're not being seen in Korea, Europe, shopping. You see trickles now, not humongous buying power.
How self-fulfilling are beliefs (currently that the market will be flat or go down) about the stock market?