The US housing market is beginning to crack as mortgage rates surge higher. Affordability has been smashed:
Demand has broken down:
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With worse to come:
At least the debt is not extreme meaning a balance sheet recession is unlikely:
More likely is that there will be spillovers to consumption as prices rollover. That will take time given the market was still rising sharply in March:
The other spillover will be a sharp retrenchment in new builds which has begun:
That will have a knock-on effect to discretionary spending which is already under the pump:
And the great danger is that demand hiccup then flows out to the rest of the world:
With domestic demand already screwed in Europe and China, voila, global recession.