Have you looked at the 30-year mortgage rate recently?
It’s the catalyst for the next crash, so it is worth paying attention to.
The issue isn’t a housing crash.
It’s a credit crash. Housing will dip, but not like ’08.
The problem lies with how quick rates raised. There are people who just got into a sub-3% 30-year mortgage a couple of years ago.
They should do all they can to hang onto that and not sell. Prices have soared and rates have jumped. The costs to buy a home using a 30-year mortgage today with higher housing prices, is through the rough compared to 2021 and even some of 2022.It’s going to cause a stalemate in the market and lead to a crash in prices.
Homes are becoming simply unaffordable, and it will go hand in hand with rental rates.
The housing market is just the tip of the iceberg.
And it’s going to support what I’m seeing as an “M” pattern for a Monster market crash ahead.
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Have you looked at the 30-year mortgage rate recently?
It’s the catalyst for the next crash, so it is worth paying attention to.
[Disc Skip]
I sound a lot like a broken record.
Because this has become a common thread in my articles, that comes up almost every post. And to me, it is the biggest item to pay attention to.
The Fed!
At this point, I likely don’t have to say more to see where this is going.
But I like to remind you of the reason anyways.
The bottom line is that they continue to press the brakes on the economy.
The economy has been resilient so far, and that’s been great to see. However, it always is for a certain period.
But, eventually, it gets to it.
The Fed will succeed, I’d practically guarantee it.
If they don’t it’s the first time in modern history that they did not cause a massive crash in the economy and stock market.
I don’t know about you, but if you are playing the odds, you are betting on a crash.
And the “M” pattern looks set to play out…
The chart cuts off the right side of the “M” a bit. I don’t have the ability to extend it anymore.
But you can see how an “M” pattern could send us back down to the low 2,000s on the S&P 500. That’s not a small wiggle on the chart.
We are talking about a 50% tumble from current prices.
And it will be all thanks to the Fed and rising interest rates.
There’s still no sign, even as 30-year mortgage rates shoot above 7%, because inflation is still on the top of their minds from the minutes of their July meeting.
They need the economy to crash.
That’s exactly what they are trying to do and what, so far, has been too resilient. I don’t think it stays that way for long.
And the start of the “M” pattern would signal the Fed might finally be winning this war.
That’s all for today.
Regards,
Chad Shoop, CMT
Editor, Bank It or Tank It ELITE