Good news for anyone patiently looking to purchase a home at a more reasonable entry point. Signs of mortgage applications have crashed to a 22-year low. For the fourth straight week in a row, Mortgage Bankers Association (MBA) data shows, mortgage applications have been dropping by 6.5 percent week after week to the lowest level since 2000.
“This should be no surprise since, as Political Calculations details, after reaching a new low for affordability in March 2022, the median new home in the U.S. became even less affordable for the typical American household in April 2022,” reports Zero Hedge.
“That’s especially clear in the following chart. It shows the basic mortgage payment for a median new home as a percentage of median household income rocketed up from 33.8% of that income in March to 37.8% in April 2022.”
The chances of an average American being able to afford a new home in the United States has reached a new record low. Compared to income levels, Americans are worse off than they have ever been.
Mortgage rates are absolutely soaring higher. The new housing bubble is likely to burst soon. Perhaps not as violently as during GFC, but certainly there is ample room for downside … pic.twitter.com/NGxpEa7CkM
— Markets & Mayhem (@Mayhem4Markets) June 14, 2022
The median household income levels in April were just 17.4 percent of the value of the median new home sold during that same month. Based on these statistics, new homes have never been less affordable for the average working American to buy than now.
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years,” says Joel Kan, MBA’s Associated Vice President of Economic and Industry Forecasting.
“The 30-year fixed rate increased to 5.4 percent after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week.”
As the US continues speeding towards hyperinflation, we wonder if the government and the private central banking parasite known as the Federal Reserve have any more tricks up their sleeve before the whole thing crashes into oblivion.
Cartoon of the week by Kaamran Hafeez & Phil Witte for The New Yorker👇. Seems that geeky FinTwit #Fed humor 😂 has gone mainstream as the almighty American housing bubble begins to burst 🥲 pic.twitter.com/qGGyVA9mtk
— Carol Strone (@CarolStrone) June 11, 2022
“The collapse is here,” wrote someone at the Hedge.
“The people deserve it,” responded another about the wickedness that has swept the nation. “They’ve stood by, or more likely cheered, as the government controlled this, ensuring maximum damage with the impending crash.”
“Republicans are just as responsible for the ‘everything bubble’ as Democrats,” wrote another, correctly pointing out that the controlled demolition of the country is a bipartisan affair.
“The common-sense warning flags have been out there for years and yet most Americans are clueless on what is transpiring and why it is,” said yet another. “Maybe they should have put down the smartphone, TV remote etc. and started due diligence on preparing.”