BREAKING: Once again, bears are using THIS chart to tell you the housing market is about to #CRASH!!
Reality check: If mortgage rates were back to 4%, the median mortgage payment would be LESS than the cost to rent (yellow would fall UNDER blue, without ANY price decrease).
Math used:
4% at $389,000 loan = $1,857
7.58% at $389,000 loan = $2,741
So yes, could this signal prices will fall? Of course. But a cut from the Fed will dramatically move the yellow line down, quickly.
If inflation stays strong though, yes, the yellow line is a problem. But this is not expected. Though.. expect the unexpected?
All the money in 2008 was made by suits identifying a market dislocation and exploiting it.
All the money in 2021 was made by retail identifying a market dislocation and exploiting it...until the suits intervened.
👀
What’s the difference with these two statements?
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