Federal Reserve PLANNING to CRASH 2022 Housing Market?

Описание: Jerome Powell and the Federal Reserve could Crash the US Housing Market in 2022. Home Buyers and Real Estate Investors need to prepare themselves for higher Mortgage Rates and the potential Real Estate Crash that could come.

And it all has to do with Inflation, which just hit 8.5% in March 2022. Surging Inflation has caused the Fed to tighten monetary policy, with the expectations of higher interest rates into the future.

The expectation of higher interest rates has already spilled over into higher Mortgage Rates, with the 30-Year Fixed increasing from 3% to 5% over the last four months. Given that the Fed owns nearly $3 Trillion in Mortgages, and is potentially planning to sell their portfolio to reduce their balance sheet, this means Mortgage Rates could surge higher in coming months. And that the US Housing Bubble could pop.

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Higher Mortgage Rates dampen Housing Demand by making it more expensive to buy a home. The first result of higher Mortgage Rates is typically reduced home sales, then higher inventory, then lower prices. Home Sales have already fallen significantly over the last several months.

At the same time higher short-term interest rates will likely make it more difficult for Real Estate Investors - particularly big, Wall Street investors like Blackrock, Invitation Homes, and Hedge Funds - to buy homes across America. That's because the borrowing costs of these entities is typically adjustable / floating rate. And the more that the Federal Funds Rate increases, the more difficulty the investors will have in buying homes.

Federal Reserve Governor Christopher Waller's Speech from March 2022 highlighted how the Fed will increasingly look at the Housing Market for a signal on how to adapt Monetary Policy. That means it is likely that if Home Prices and Rents keep increasing, the Fed will increase interest and mortgage rates further.

NYT Article on Powell & Rates: https://www.nytimes.com/2022/03/21/bu...

Federal Reserve MBS Holdings: https://fred.stlouisfed.org/series/WS...

Fed March 2022 Meeting Minutes: https://www.federalreserve.gov/moneta...

Chris Waller Speech: https://www.federalreserve.gov/newsev...
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