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The Masked Tulip

Fitch Warns On China As Housing Market Crashes 26% In One Month

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http://www.marketoracle.co.uk/Article27537.html

I know that we have been trained to ignore supply and demand in commodities as well as to pretend that all prices are inelastic and that American consumers will buy anything at any price because they are generally mindless sheep that you can lead into anything with the right jingle but, if they are not willing to buy a $250,000 home with a 5% mortgage - what's going to happen when that mortgage is 6%?

At 5%, a $250,000 mortgage has a monthly payment of $1,342.05. At 6% that payment jumps up to $1,498.88 - 10.5% higher! At 7% it's $1,663.26, 24% higher - that's the "cost" of housing as rates tick higher but, of course, that will force housing prices even lower to compensate and the Fed will tell us that inflation is low because home prices will be falling faster than food prices are rising - so we have that to look forward to...

2011-Case-SHiller-updated.png

I mentioned yesterday that China tightened their rates and home prices in Beijing fell 26.7% in the month of March. I waited all day to read more about it in the WSJ or Bloomberg or to see them discussing this on CNBC but no - it's not the kind of news they want you to hear so - for your own good, it is not mentioned. I had to find this news in Business China but it's also in the China Daily and the People Daily but where it isn't is in any US newspaper I've looked at.

A lot more bear stuff about house prices, food inflation and the giant squid.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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