What's Really Going on With the U.S. Housing Market l Jason Hartman l Ep 283
Sep 21, 2023
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Jason Hartman, expert in U.S. housing market, breaks down the current state of the housing market with topics including lowest housing affordability in 37 years, the Hartman Comparison Index, college tuition as a scam, mortgage delinquencies and affordability, millions of distressed sellers, millennials entering the housing market, the housing market pivot, the new home market, banking crash or crisis, inflation and the elite class, BRICS as a global threat, and central bank digital currency.
Housing affordability is currently at its lowest level in 37 years, but it's important to consider the historical context and not just the outlier period of the COVID era.
The U.S. dollar remains strong and unlikely to be threatened by BRICS nations, as the U.S. possesses stability, unity, and continues to lead the global economy.
Deep dives
Lowest housing affordability in 37 years
Housing affordability is currently at its lowest level in 37 years due to the tripling of the cost of money from its previous lows. However, it is important to consider this in the context of overall history and not just the outlier period of the COVID era. Comparing the housing market to previous periods, such as the 1970s, allows us to see the bigger picture. It is crucial to understand that income property is a multi-dimensional asset class, and it's not just about the price of the house but also the yield it generates. As investors, we must adjust our strategy based on the market conditions and factors such as population growth and household formation. Millennials, for example, are forming households more slowly and taking their time with life, which has an impact on housing demand.
Inventory shortage and its impact on the housing market
The housing market is currently experiencing an inventory shortage, with a shortage of about 700,000 homes needed to reach a normal market. This shortage is causing a decrease in sales activity and longer days on the market. While some people predict that the increase in inventory will lead to a housing crash, it's crucial to compare the current market to previous periods. The current inventory levels, although increased from the historic lows of the COVID era, are still historically low. The low inventory is primarily due to the lock-in effect caused by homeowners with super cheap mortgages that they do not want to give up. As a result, the housing market remains strong, and while prices have become less affordable, homeowners with low-rate mortgages see their properties as highly valuable assets.
Potential banking crisis and interest rates
There is a concern that banks may face a crisis due to reasons such as the inverted yield curve, the decrease in bond values, and the impact of rising interest rates. Banks, especially those with hold-to-maturity bonds purchased at low rates, may face challenges as rates increase and the value of these bonds decline. While it is difficult to predict and fully understand the state of banks, the Federal Reserve will likely have to pivot due to potential damage caused by further rate increases. This may include protecting the U.S. dollar and the overall banking system. However, it is important to note that the U.S. dollar remains strong compared to other currencies, and the U.S. is likely to remain the hegemon for a significant period.
The U.S. dollar, BRICS nations, and currency wars
Contrary to some beliefs, the U.S. dollar remains strong and is unlikely to be threatened by the BRICS nations. While the BRICS countries may meet and discuss various economic matters, they have separate interests, cultural differences, and lack the unity and stability that the U.S. possesses. The U.S. dollar continues to be the primary reserve currency, and countries around the world rely on it. The threat of currency wars is real, but the U.S. remains focused on protecting the dollar's value and continuing to lead the global economy. While new technologies, such as CBDCs (Central Bank Digital Currencies), are emerging, the U.S. dollar is expected to remain the dominant currency for the foreseeable future.
I sat down the with LEGEND Jason Hartman to talk about what is happening in the U.S. housing market right now and in the months to come. There is a lot of chatter about the state of things and Jason is a WIZARD and breaking things down in comparison to the history, other countries, etc. Give it a listen.
To watch the full episode, join our Wall Street Rebel Insider Discord Group here: https://www.fundlaunch.com/wsr-launch--47111?sl=bullish
[00:02:14] Lowest housing affordability in 37 years.
[00:03:59] The Hartman Comparison Index.
[00:09:23] College tuition as a scam.
[00:11:01] Mortgage delinquencies and affordability.
[00:15:53] Millions of distressed sellers.
[00:18:29] Rolling back the clock.
[00:23:28] Millennials entering housing market.
[00:26:19] The housing market pivot.
[00:29:00] The new home market.
[00:33:56] Banking crash or crisis.
[00:36:04] Inflation and the elite class.
[00:39:29] BRICS as a global threat.
[00:43:21] Central bank digital currency.
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