To most people its obvious, the Real Estate Markets are set up for another crash. Many think this next Real Estate crash will be worse than 2008, and some think the market crash won't be as bad But the hardest thing to ever predict is "When" will the markets crash. In this video, I will show you what new things are developing in the real estate and mortgage markets and we will try and take a guess to predict the timing of the next real estate housing correction.
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There are 3 major factors that we will discuss in depth
1. Debt Loads
U.S. households are cracking under the weight of the debt they're carrying.
Household debt has risen for 23 straight quarters – and as of April, it stands at $14.3 trillion,
according to the Federal Reserve Bank of New York.
Auto debt's been rising steadily for 36 months and now totals $1.35 trillion.
Student loan debt exceeds $1.42 trillion. Credit card debt totaling more than $1.079 trillion
just saw delinquencies rise 9.09% in April – to their highest level in two years.
2. No Income
As job losses increase and furloughs turn into permanent layoffs, households are going to have a harder and harder time paying their bills, especially their biggest monthly bill, their mortgage or rent.
Since the pandemic started about 35 mil Americans have filed for unemployment
taking the unemployment rate from a historically low 3.5% in Feb to about 15% today
3. This is the big one... Mortgage Forbearance
The home is the single biggest expense for most Americans – accounting for a hefty 33% of their household budget, per the BLS most recent Consumer Expenditure Survey.
About three-quarters of all mortgages in the United States are federally guaranteed. The rest are private, or non-agency mortgages.
The CARES Act stimulus
grants relief, or "forbearance," to homeowners whose mortgages are federally guaranteed
by Fannie Mae, Freddie Mac, FHA, the VA, and Ginnie Mae Under the CARES Act, borrowers with federally backed loans are granted 180 days of forbearance, when loan payments are postponed
or reduced but interest still accumulates,
According to the Mortgage Bankers Association, as of April 30, 7.3% of all active mortgagors,
with $841 billion in unpaid principal, asked for and got forbearance.
Mortgage servicers say more than half a million mortgagors a week are adding to the growing number of borrowers not paying their mortgages, and they expect that number to increase every week for at least the next 8-12 weeks.
As big as those numbers already seem to be, they could turn out to be a drop in the bucket if the St. Louis Federal Reserve Bank's rojection of 47 million Americans eventually becoming unemployed becomes reality.
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#realestate #marketcrash #when
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