There is a slew of economic news and data out this week that is begging the question if real estate is going to crash big in 2023.
For starters, the Federal Reserve is worried about commercial real estate posing risks to the financial system. From Cran’s Chicago Business:
Worries about empty office towers have reached the Federal Reserve, which has warned that ongoing problems in commercial real estate threaten the stability of the financial system.
Cran’s Chicago Business
The article warns that defaults are rising and if it continues the dominoes could start a chain reaction across the financial system.
To add insult to injury, CNBC reports that mortgage demand is at a 28 year low.
Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.
CNBC.com
But wait there’s more! CNBC also reports that the 10 year Treasury has hit 4 percent and 30 year mortgage rate are nearing 7 percent again today.
Finally, Lowe’s reported earnings today and warned of a “more cautious consumer.”
Lowe’s on Wednesday reported fiscal fourth-quarter sales that fell short of Wall Street’s expectations, while also issuing a conservative outlook for the current year as it prepares for a “more cautious consumer.”
CNBC.com
It’s clear the Fed may have to execute 50 basis point hikes to contain ongoing inflation and strong jobs but we’ll see so stay tuned, stay profitable and stay solvent…