The United States currently has the most expensive real estate market ever. Remember the credit crunch in 2008? Well, real home prices (adjusted for inflation) in America are currently 10 percent higher than they were in 2008. Even more interesting, home prices are 80 percent higher than the historical average (based on the period 1890 – 2023).
🎁 This week: Trade your first €10,000 in crypto completely free
Houses have never been so expensive
Homes in the United States have never been so expensive. Part of the explanation is that supply is also 40 percent below average.
It is also noticeable that demand for mortgages is at its lowest level since 1994, but this is of course because it is very difficult for consumers to get loans. Mortgages are expensive right now…
Consumers are feeling the pain of higher tariffs:
Meanwhile, a record 20% of consumers say it is “much harder” to get a loan.
When the Fed began raising interest rates in March 2022, only 9% of consumers said they felt the same.
In other words, the number of consumers who believe it is more difficult to… pic.twitter.com/D7AeEqFGwn
– The Kobeissi Letter (@KobeissiLetter) November 30, 2023
If house prices are doing so well, you would expect there to be huge demand for mortgages, but of course high interest rates are putting an end to that. What’s going on with this strange market?
Based on the chart above, you might expect property prices to fall, but as long as people don’t sell due to high interest rates, there won’t be extreme drops. However, there could be another explanation for the lack of declines…
The escape from scarcity leads people to Bitcoin
The lack of a correction could also be related to the increasing flight into scarcity that more and more people are talking about.
The enormous national debt in the USA, combined with high interest rates, means that more and more dollars will probably have to be printed in the coming years. As a result, there could be a flight to scarcity.
This flight into scarcity will lead people into real estate, but Bitcoin, gold and silver are also potential terminals for a gigantic pool of capital that is currently still invested in US dollar government bonds.
Despite the US Federal Reserve’s aggressive interest rate hikes, Bitcoin is still performing very well at the current price of $38,600. Today there is a whopping increase of almost 2 percent on the food banks.
Post views: 0