What will be he cause of th enext recessio?

A Housing Collapse Again**

A particularly notable asset price inflation is, once again, that in the price of houses, which are the biggest investment most households have and are the mortgage collateral for the biggest loan market in the world. House prices are now rising in the U.S. at the unsustainable rate of more than 18% a year, but this is also global problem. Many countries, about 20 by one reckoning, face extreme house price inflation. Said one financial commentator, “This is now a global property bubble of epic proportions, never before seen by man or beast, and it has entrapped more central banks than just the Fed.”

House prices depend on high leverage and are, as is well known, very interest rate sensitive. What would an actual market-determined mortgage rate look like, instead of the Federal Reserve-manipulated 3% mortgage rate the U.S. has now? A reasonable estimate would begin with a 3% general inflation, and therefore a 4.5% 10-year Treasury note. The long-term mortgage rate would be 1.5% over that, or 6%. That would more or less double the monthly payment for the same-sized mortgage, house prices would fall steeply, and our world record house price bubble implode. Faced with that possibility, so far the Federal Reserve’s choice has been to keep pumping up the bubble.

Overpriced, leveraged real estate is a frequent culprit in financial crises. Maybe once again.

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The history of the demoRAT party for decades .

I’ve watched real estate explode. Sold my home last year for far more than I would have paid for it.

I’m in Colorado Springs cleaning up ad getting ready to put this own home on the market.

It’s expected to sell for 325-350K and it certainly isn’t worth it.

Over priced market, you bet. Will it trigger recession? Who knows.

p.s. Love the thousands of assembled vehicles waiting for computer chips from our best friend and supplier, China.

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I see they are $ 3000 to $11000 OVER sticker price . WTF
My property tax assessment went from $350,00 to $405,000 in 1 year WTF !!!

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