Walk The World
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!!
my bank gave me a 2.6% discount for the life of the loan, all I had to do was negotiate.
The laziness of the Australian costs them money, lots of money.
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?
Agents and Bag Holding Vendors still in denial.
Hi Martin. Do you have a prediction on how far house prices may drip?
Thank you great information it’s going to get interesting in coming weeks and months 🙏🙏🙏🌎🌎🌎🫢🫢🫢🤔🤔🤔
If you have a fixed mortgage at a rate lower than the reserve rate, can they change that rate?
Well historically when the Stock Markets fall, property market definitely falls as well, although property falls lag by about 6-months.
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.
Ahead of the curve Martin , as always.
I assume the prospects of a "bail in" are remote?
Anyone want to buy some tulip bulbs?
Thanks Mr. Martin. Again… hopefully Labor can right the ship of fantasy and return some reality to Australia.
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.
Interest rate hike has done nothing, property still selling in VIC like hot cakes 🤦
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?…..
inflation?…
their foot is on the clutch and they are about to change gears…
Yep, I think it's going to be three years of tightening credit and higher interest rates .
Nope. Interest ratyes do NOT follow inflation.
oh dear. it's not easy is it?
Mortgage Bomb is about to go off in Australia.
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.
Very intensely blinking eyes
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.
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
So did this amount to a increase in the spread between the 10yr Treasury and 10yr mortgage debt?
Screw it I'm fixing all super to cash. I don't trust anyone.
Those bankster weasels….
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.
Wow! that's big news. Thanks