Sometimes I wonder if the Fed spent the last three months of "QT"* just waiting for the big banks to get their derivative books in order before doing a rugpull on real estate.
From MarketWatch, August 30:
The housing sector is in something of a recession, and an economist at Goldman Sachs says the downturn will continue — and eventually slow down the still-rapid pace of house price increases.
Goldman Sachs economist Ronnie Walker said housing starts have dropped 20% from their peak and existing home sales have skidded by 30%.
Mortgage rates as high as 5.8% — they were just 3.2% in January — are partly to blame. Sales and permits have fallen more sharply in regions where they increased the most in the earlier part of the pandemic, suggesting a retreat from the pandemic-related boost to housing, said Walker.Walker says existing home sales will fall another 12% by the fourth quarter, and new home sales will be flat. The latest survey from the Conference Board says plans to buy a home within six months has dropped to the lowest level since 2015....
