Do we enter a recession? 42% of mortgage refinancing requests are rejected, the most in history.
In addition, the debt of the private sector is ~ 30.5 t $, and $ 18 t in household debt (mortgage, car, credit card, heloc). It is almost as high as national debt, bearing much higher interest rates, and the private sector cannot print money or collect taxes.
Oh, and reimbursements of student loans are about to resume at much higher levels after payments to postpone COVIVE loan debt has been erased. Are the United States screwed?
Are we in a recession or do we head to one?
In addition to debt, the housing market is out of the hands of American buyers and in the hands of China.
Foreign creditors, led by China, poured American mortgage obligations, injecting new anxiety into the increase in mortgage rates. Nearly $ 1.32 dollars in titles backed by mortgage claims in the United States were in foreign hands at the start of the year, but the tide is rapidly. China alone has reduced its participation by almost 20% in December 2024, while Japan and Canada struck fresh purchases.
The housing market is crazy.
Why buy a house that has increased by + 212% in the past 7 years?
I have the impression that it is logical to wait until prices and prices drop.
Am I wrong? pic.twitter.com/3h9iod4xiv
– Ethan (@ezebroni) April 6, 2025
The retirement of the federal reserve of the securities market backed by mortgage claims throws another key in the housing sector. Once a stabilizing force in crises like the pandemic, the Fed now leaves these assets bleeding from its books, adding weight to an already tense market.
Mortgage analyst Eric Hagen called him what he is: “another layer of pressure”.
Home buyers feel pressure
The increase in rates reaches the buyers of houses particularly harshly during what should be a busy spring housing market. The high prices of houses, associated with consumer fears on employment safety and weak savings accounts, have already reduced the optimism of buyers.
A Redfin survey revealed that 1 potential buyers out of 5 Sale of shares to finance the deposits, showing how tight personal finances have become. In addition, loan rejection rates have reached records of records for mortgage refinances and car loans.
What awaits us for the housing market?
The increase in mortgage rates, the increase in consumer debt, sales abroad in MBs and the reduction in purchasing power tighten the effect of the housing market. If foreign investors continue to empty American obligations, rates could easily exceed buyers, pressing buyers and lead to market activity in the soil.
The longtime strategy of the Fed could stabilize things later, but the immediate relief is not in the cards. In other words, a recession in the United States is still on the table.
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Main to remember
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Do we enter a recession? 42% of mortgage refinancing requests are rejected, the most in history.
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Foreign creditors, led by China, poured American mortgage obligations, injecting new anxiety into the increase in mortgage rates.
Are we going to a recession? The housing market is about to collapse first on 99Bitcoins.
