Housing Market Update (September)

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Housing Market Update (September 2020)

The value of all the real estate in the United States right now is valued at approximately $35 trillion USD.

There's roughly $10T in outstanding mortgage debt in the USA.

The Fed MBS holdings are now $2T! (Up $1T since March 2020 of this year)

So that would mean that the Fed are holding 20%? of all mortgage debt in the USA!

So you have to ask the question, why are they doing that?

Mortgage delinquencies are up 450%

A delinquent mortgage is a home loan for which the borrower has failed to make payments as required in the loan documents. ... If the borrower can't bring the payments on a delinquent mortgage current within a certain time period, the lender may begin foreclosure proceedings.

My prediction is that we’ll see high delinquencies in the following regions within the USA: New York/New Jersey area, Florida, Nevada, and possibly Hawaii. More specifically, New York to Newark (mass exodus of tenants), Mianim (heavy apartment rentals) Orlando, (entertainment jobs have crashed, 10’s of thousands on furlough or laid off), Las Vegas, (entertainment industry has imploded there, with again 10’s of thousands on furlough or laid off).

Average debt to income ratio, 2006-2007 it hit 38, this is when everything crashed! Well look at this trajectory going up to 2018! It was already at 37 then, so I'd be really shocked if it isn't at 38 by now. Unfortunately we just don't have that data available right now with strong accuracy. We can guess at it, but I prefer to have the analytics there in front of me.

Most of the movement in the financial markets right now around housing is in refinancing. and one of the challenges with refinancing is then it's taking a lot longer than normal, probably around twice as long as it normally takes you to the backlog, remote working covid, restrictions, inefficiencies, etc.

Overall, people are heavily refinancing right now.

Many are doing it just for the new low rate, but others are doing it to create a safety buffer after losing their jobs, this is another reason for the savings rate (people ACTUALLY saving money in their bank accounts) is going up right now. The high savings rate is very heavily correlated to the amount of refinancing right

Forbearance comes to an end for a lot of American households at the end of this month, so I would predict October will see a new wave of forbearance plans coming into force as people still can't afford to make their payments.

We’ve got about 50% of mortgages still in forbearance as we go into October meaning we have $5T of loans in forbearance right now and the Fed own $2T of that amount!

We’re getting to the end of the year now, where I think things will slow my prediction for a housing crash still stands for early 2021.

Chapters:
00:00 - Opening
00:34 - National Home Price Index
02:06 - Prediction Update
02:50 - 32% Missed Payments
03:18 - DTI Ratio (Average Debt to Income)
07:16 - Feddie Mac, Fannie Mae, Fed Buying mortgages
09:50 - Mortgage Delinquencies
10:38 - Mortgage Forbearance
11:33 - HPI Graph (Home Price to Income Ratio)
13:00 - Layoff, Job Losses
15:42 - Stagflation, Deflation, then Inflation
18:35 - 4 Week Average
19:54 - New Listings (Supply & Demand)
22:00 - High Housing Prices Explained
23:30 - Migration Map (Where people are moving to)
28:11 - Refinancing Guidance
30:14 - Conclusion

DISCLAIMER
This video is for entertainment purposes ONLY.
I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.
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