Jun. 23 at 12:31 AM
$SPY $LEN $DHI
The recession has already begun.
Think what you want to, but the real economy is smoked.
Here’s the thing.
The FED can’t cut rates and they sure can’t raise them.
The only thing that can happen now is stagflation, followed by deflation.
Named recession comes by mid 2027 or before.
The FED is always late. So let’s say they start cutting rates in June 2027, the 10 year and 30 year won’t care. We’re going to see long term rates remain high.
So even if the FED takes their rate to 3% the 10 year will stay in the 4’s and the 30 year will be in the 5’s. Bear steepener.
What does that mean for 30 year mortgages?
They will remain in the 6.5-7.5% range.
Buying a home isn’t going to get cheaper on the rate side, so home prices will have to fall.
Just think about how many workers are tied to the housing industry. It’s not just the builders, think about all the manufacturing, suppliers and transportation.
I said in 2022 that 2026 would mark the peak for this cycle.
