{"id":153934,"date":"2019-08-21T10:10:16","date_gmt":"2019-08-21T14:10:16","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=153934"},"modified":"2019-08-21T08:51:00","modified_gmt":"2019-08-21T12:51:00","slug":"fed-too-late-to-prevent-a-housing-market-crash","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/08\/fed-too-late-to-prevent-a-housing-market-crash\/","title":{"rendered":"Fed Too Late To Prevent A Housing Market Crash?"},"content":{"rendered":"
August 21, 2019<\/div>
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By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

Real Estate is one of the biggest purchases anyone will make in their lifetime.\u00a0 It can account for 30x to 300x one\u2019s annual income and take over 30 years to pay off.\u00a0 After you\u2019re done paying for your property, now you have to keep paying to maintain it and to support the property taxes to keep it.\u00a0 What has happened to the US Real Estate market since the 2008-09 global credit market collapse and is the US Fed behind the curve?<\/p>\n

Case-Shiller Home Price Index<\/h3>\n

One of the most common indicators used to measure national housing affordability and price trend is the Case-Shiller Home Price Index.\u00a0 In this chart, we are displaying the Case-Shiller National Home Price Index \u2013 including all markets in the US.\u00a0 It is fairly easy to see that in last 2016, on a national level, the Case-Shiller index had reached the 2006 peak level.\u00a0 After that, the new Trump economy pushed it even higher where we now near 210.\u00a0 This is a very uncommon level for this index and because we are in uncharted territory with this 210 ranking, it should concern everyone that a reversion maybe somewhere in our future.<\/p>\n

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Fed Funds Rate data from early 1990 till now<\/h3>\n

The question we\u2019ve been asking our research team is \u201cIs the US Fed behind the curve in the markets and how will that translate into the US\/Global equity markets?\u201d<\/p>\n

When we consider the recent Fed rate increases (starting in 2016), our research team compared these levels to a modeling system we build back in 2013.\u00a0 This modeling system suggests what the US Fed should have been doing based on certain GDP, Population and other factors.\u00a0 The chart below is the Current Fed Funds Rate data from early 1990 till now.\u00a0 The rise in valuation on the Case-Shiller index can almost be directly correlated to the amount of money available in the global markets and the US Fed rate levels.\u00a0 More money and lower interest rates mean everyone was stampeding into housing expecting it to increase in value (which it did).\u00a0 But what is next with the US Fed turning cautious recently?<\/p>\n

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US 30 Year Mortgage Rate<\/h3>\n

The US 30 Year Mortgage Rate has continued to rotate between 3.5% and 5% (on average).\u00a0 We all know these rates vary depending on the borrower\u2019s credit rating and other factors. Yet we believe any rates above 4% (on average) are dangerous for the markets and once lenders start to tighten requirements for loans while sellers start to aggressively decrease their asking price in order to attract buyers, we could see a massive shift in the market within a matter of months, not years.<\/p>

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CONCLUDING THOUGHTS:<\/h3>\n

The global markets are setting up for some type of event.\u00a0 Capital is being pulled out of the markets as investors\/traders wait to see what happens with the US\/China trade issues, the EU as well as the US Presidential election in November 2020.\u00a0 Many economists and researchers believe a recession is fast approaching and are waiting for any signs that it is starting.<\/p>\n

Are the turmoils setting up in the global stock market about to fracture into the global real estate market as well?\u00a0 As investors and consumers engage in risk aversion processes, how will that result in continued economic activity in certain sectors of the global market?\u00a0 Could it be that we are about to experience an economic contraction\/reversion event that many analysts have failed to comprehend?<\/p>\n

In part II of this article, we\u2019ll show you our US Fed proprietary modeling system\u2019s data and show you why we believe something big is going to unfold over the next 3 to 5+ years.\u00a0 We\u2019ll also highlight some very interesting data regarding the US real estate market that you should be preparing for right now.<\/p>\n

Real Estate has already run through the price advance cycle and the price maturity cycle.\u00a0 There is really only one cycle left to unfold at this point \u2013 the \u201cprice revaluation cycle\u201d.\u00a0 This is where the opportunity lies with a select real estate ETF I am keeping my eye on.<\/p>\n

I can tell you that huge moves are about to start unfolding not only in real estate, but metals, stocks, and currencies. Some of these super cycles are going to last years. Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide:\u00a02020 Cycles \u2013 The Greatest Opportunity Of Your Lifetime<\/strong><\/a><\/p>\n

As a technical analysis and trader since 1997, I have been through a few bull\/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive\/life-changing if handled properly.<\/p>\n

I urge you to visit my\u00a0Wealth Building Newsletter<\/strong>\u00a0and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible, get a\u00a0FREE BAR OF GOLD<\/a><\/strong>\u00a0and\u00a0ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next set of crisis\u2019.<\/em><\/strong><\/p>\n

Chris Vermeulen
\nTheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders.com Real Estate is one of the biggest purchases anyone will make in their lifetime.\u00a0 It can account for 30x to 300x one\u2019s annual income and take over 30 years to pay off.\u00a0 After you\u2019re done paying for your property, now you have to keep paying to maintain it and to support the property […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-153934","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=153934"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153934\/revisions"}],"predecessor-version":[{"id":153935,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153934\/revisions\/153935"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=153934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=153934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=153934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}