I have also stressed that it would be hard for the 10-year level to break below 3.37% and 3.42%. In that forecast, I wrote that if the economy stays firm, the 10-year yield range should be between 3.21% and 4.25%, equating to mortgage rates between 5.75% and 7.25%. Not only did I hold that line toward the end of 2022, but it was also the staple range in my 2023 forecast. That was key because historically the next big move in yields would be lower. 27, 2022, I made a case for lower mortgage rates using one of the Fed’s critical recessionary indicators: the 3/10 bond yield inversion. to stop hiking rates.įor me, 4.25% on the 10-year yield was the top. For instance, England almost lost its pension funds, and Japan needed intervention for theirs. ![]() The 10-year yield is central to all my economic work, but trying to find a top in 2022 was very challenging due to the market conditions where bond yields rose so fast and the strong dollar put so much stress on the world markets. Now begins the journey to stabilization in housing data. My recession red flag model doesn’t say we are in a recession, but means we should be more mindful to track economic data at this stage, especially what can lead to higher jobless claims. 5, 2022, a few days after I presented to The Conference Board, I raised my sixth recession red flag for the overall economy. We can see this over the last year as jobs are being lost in the industry, incomes are falling due to less transaction volume, housing demand collapsed and housing permits fell since the builders had a backlog of homes to work off. On June 16, 2022, I put the housing market into a recession, which is where housing demand, housing jobs, housing income and housing production all drop. In 2022, mortgage rates got as high as 7.37%, so the question was: how low do rates have to go for housing demand to get better?īut first, let’s start with some key dates in 2022. We have had plenty of times in the previous decade when mortgage rates fell and demand improved, but that was with a lot lower mortgage rates. In 2022 it was all about finding a point in time when I thought mortgage rates would fall, which was key to understanding how the purchase application data would react to lower mortgage rates. The point of this article is not to focus on the years 2012-2021, but on how crazy the housing data has been since 2022 and when the housing market changed from a historic crash in demand to stabilization. 2019 – Home-price growth was cooling off.2018- 5% mortgage rates (Start of the bubble crash for sure). ![]() 2016- Home prices got back to the bubble high.I mean, it’s year 11 now of the housing bubble 2.0 crash.Įach year is different, but here are some reasons they gave for home prices to crash over the past 11 years: Those who know my work over the last 10 years know that I have Batman/Joker relationship with the housing crash people, because they never stop. Well, it’s June 9, 2023, and home prices have been firm month to month, not showing anything that resembles the housing bubble crash years. ![]() They went all in during COVID-19 in 2020, doubled down in 2021 as the forbearance crash bros but really bet the farm on a massive home-price crash in 2023 after the most significant home sales crash ever in 2022. The housing bubble boys are a crew that from 2012 to 2019 screamed housing crash every year. In fact, home prices have firmed up higher recently. Home prices aren’t crashing, despite what the housing bubble boys are saying.
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