July 26, 2022 by SchiffGold 0 0
It is becoming increasingly difficult to deny the reality of the recession. Even as the Biden administration attempts to wriggle out of this reality with a propaganda campaign, many in the mainstream appear to be waking up.
On Monday (July 25), Reuters reported that the falling housing market is a red flag signaling a recession.
The air hisses out of the case bubble faster and faster every day. Pending sales plummeted in June and the home inventory on the market soared as mortgage rates continue to rise rapidly.
Year-to-date, existing home sales are down 21.1%. This coincides with a rapid rise in mortgage rates. The average 30-year mortgage rate has risen to nearly 6.4%.
Last week, homebuilder sentiment on the National Association of Home Builders (NAHB) housing market index plunged to its lowest level since May 2020. Meanwhile, the Department of Commerce said housing starts fell 2% in June to a nine-month low.
With the US Federal Reserve raising interest rates by 75 basis points and most expecting another 3/4% hike in July, expect mortgage rates to continue their rapid rise. As Reuters noted, the housing market is “the sector most sensitive to interest rates,” and it’s decelerating.
According to the latest Reuters report, “The previously booming housing market is bottoming out amid a broader economic slowdown.” [Emphasis added]
With the Federal Reserve set to hike interest rates again this week, Wall Street is wary of signs of a recession, and recent housing data suggests the sector could be a harbinger of a slowing economy.”
One analyst told Reuters that housing markets and housing construction are “cyclical moves”.
“We are in a late cycle before the recession,” he said.
That would mean that the next part of the cycle is a full blown recession.
The housing bubble is just one of the many economic distortions created by the government and Federal Reserve response to the COVID-19 pandemic.
The Fed burst a housing bubble when it artificially depressed interest rates and bought billions of dollars in mortgage-backed securities. Now the central bank has fueled the bubble by raising interest rates.
The Fed has also blown a lot of air into the broader economy. It also pricked that blister.
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