If Democrats find they have lost their majority in the House, there will be many factors, including runaway crime and lawlessness, but most likely, the top reason will be the economy.
Everyday life for Americans has been rocked the past year because of inflation and the recession, and all you have to do is look at the housing market to see a snapshot of the economic problems.
Over the past couple of years, home prices have blown up as people stayed home during the pandemic and watched their values soar. Those days are long gone.
Since May, roughly $1.5 trillion of home equity has vanished. The average homeowner has lost $30,000 in equity in the past six months.
As mortgage rates began to go up in the spring, it became less affordable for many people to buy a house. The average monthly payment on a home with a mortgage and a 20% down payment is up about $1,000. That alone can take many people out of the market.
According to a CNBC story, homeowners in major markets like Los Angeles, Phoenix, Miami, San Diego, Vegas, and Tampa will have to spend twice the long-term average amount of median household income on their mortgage payments.
Prices of homes are down 2.6% since the beginning of July. One piece of data analysts in the real estate industry will be keeping a close eye on how many borrowers are underwater on their mortgages. The percentage right now is low, under 1%, but as the economy continues to struggle, that number is sure to rise, and it has doubled already since May.
Here’s what Ben Braboske, the president of data and analytics at Black Knight told CNBC.
“This is obviously a situation that demands careful, ongoing monitoring, but to put that into context, just 3.6% of nearly 53 million U.S. mortgage holders are either underwater or have less than 10% equity in their homes, roughly half the share coming into the pandemic.”
The results of the mid-term elections will go a long way in determining which direction this troubling data will go in the next year.
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