Pop Goes The Mortgage Rate!

We know that Central Banks are lifting rates, and seem willing to wear a fall in stock markets and bond prices. But what about the property market? Are they willing to see that correct too?

Well, so far as the US is concerned, Friday was an important day in the history of finance, because of the strong CPI figures which we discussed in our post yesterday. Both the headline and core CPI readings were higher than markets were expecting. Neither stocks nor bonds enjoyed the news.

It changed the bond market’s view of Fed trajectory, higher and quicker, but it also broke the Mortgage-Backed Securities market, in the US, In bond jargon, MBS went “no-bid.” No buyers for MBS. Then came just a few posted prices beyond borrower demand, not wanting to buy except at penalty prices. Overnight the retail consequence has been a leap from roughly 5.50% to 6.00% for low-fee 30-fixed loans.

This signals a potential full-stop to housing finance, and so a big dent ahead in the housing market. Sure stocks were down 2-3% on the day, but this event is more mega. Stocks would be down way more if a potential freeze in housing growth is factored in.

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Caveat Emptor! Note: this is NOT financial or property advice!!

Written by Walk The World


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  1. Nobody Special Finance did a good vid on the MBS bond market. Will the Fed buy the MBS they sold into the market because no one else wants to touch them?

  2. Yea, "pop goes to mortgage rates" until the economy takes a nose dive, then the RBA and the RBNZ tanks the OCR again because they want a "soft landing". The Central Banks are all reactivate, not proactive. They will give us all whiplash by the end of next year.

  3. My mate just bought his 3rd investment property, another $570k in debt for a little dog box. And he won't listen when I tell him he probably bought it at the top. And things will probably get worse.

  4. so we have a group (the fed) consisting of private banks with share holders all protected by a word salad…
    who's shares would they be interested in?…..
    their foot is on the clutch and they are about to change gears…

  5. Look at the cost of building a new home, look at the cost of renting, supply//demand.
    For years this channel has predicted the end of the world for home values, and you’ve not been right yet.
    It’s winter, the market slows, money has never been cheaper as rates rise, inflation takes of, cost of
    living tanks, wages go no where, sure, things will slow; but your constant Armageddon predictions I just can’t see.

  6. Ha Ha Ha Will increasing interest rates cause any changes in crazy Aussies thinking FOMO because crazy Chinese still keep on buying property. It will take 6 to 12 months before anyone in Australia will wake up to themselves. We are so different in Australia that we are special, maybe, if the double blow torch of real inflation – interest rates hits them right between the eyes for a few months property prices should fall 40 to 60%. In the USA 50 to 80% falls should happen soon. Aussies are so special nothing affects them specially logic from Martin's data presentations.

  7. The only way they can kick the can further is by adding more false trillions into the casino and giving a massive upsurge before total market catastrophe
    I doubt this will happen though as the WEF have only 8 years left to steal everything

  8. It's official the government has lost the plot.
    The economy is in a constant state of unbalanced forces.
    Nothing but chaos from this point onwards.
    Good luck trying to work out what's next.

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