{"id":38944,"date":"2018-10-10T09:58:21","date_gmt":"2018-10-10T14:58:21","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38944"},"modified":"2018-10-10T09:58:21","modified_gmt":"2018-10-10T14:58:21","slug":"rising-interest-rates-start-popping-bubbles-the-end-of-this-expansion-is-now-in-sight","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38944","title":{"rendered":"Rising Interest Rates Start Popping Bubbles \u2014 The End Of This Expansion Is Now In Sight"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/www.dollarcollapse.com\/rising-interest-rates-pop-bubbles\/\">Rising Interest Rates Start Popping Bubbles \u2014 The End Of This Expansion Is Now In Sight<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p>Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening.<\/p>\n<p>At first the effect on the broader economy is minimal, so consumers, companies and governments don\u2019t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates begin to bite and borrowers get skittish, throwing the leverage machine into reverse and producing an equities bear market and Main Street recession.<\/p>\n<p>We are there. After a year of gradual increases, interest rates are finally high enough to start popping bubbles. Consider housing and autos:<\/p>\n<p><strong>Mortgage Rates Up, Affordability Down, Housing Party Over<\/strong><\/p>\n<p>The past few years\u2019 housing boom has been relatively quiet, but a boom nonetheless. Mortgage rates in the 3% \u2013 4% range made houses widely affordable, so demand exceeded supply and prices rose, eventually surpassing 2006 bubble levels in hot markets like Denver and Seattle.<\/p>\n<p>But this week mortgages hit 5% \u2026<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/d3fy651gv2fhd3.cloudfront.net\/embed\/?s=unitedstamorrat&amp;v=201810031107x&amp;d1=20170909&amp;d2=20181009&amp;type=type=column&amp;h=300&amp;w=600\" width=\"600\" height=\"300\" frameborder=\"0\" scrolling=\"no\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>\u2026 and people have begun to notice. Here\u2019s an example of the resulting media coverage:<\/p>\n<blockquote><p><strong><a href=\"https:\/\/www.msn.com\/en-us\/money\/realestate\/mortgage-rates-top-5-percent-signaling-more-home-price-cuts\/ar-BBO9Pqg?li=BBnbfcN\" target=\"_blank\" rel=\"noopener\">Mortgage rates top 5 percent, signaling more home price cuts<\/a><\/strong><\/p>\n<p>Some of us out there still remember when the average rate on the 30-year fixed mortgage hit 9 percent, but we are not the bulk of today\u2019s buyers. Millennials, now in their prime homebuying years, may be in for the rude awakening that credit isn\u2019t always cheap.<\/p>\n<p>The average rate on the 30-year fixed loan sat just below 4 percent a year ago, after dropping below 3.5 percent in 2016. It just crossed the 5 percent mark, according to Mortgage News Daily. That is the first time in 8 years, and it is poised to move higher. Five percent may still be historically cheap, but higher rates, combined with other challenges facing today\u2019s housing market could cause potential buyers to pull back.<\/p><\/blockquote>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Rising Interest Rates Start Popping Bubbles \u2014 The End Of This Expansion Is Now In Sight Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening. At first the effect on the broader economy is minimal, so consumers, companies and governments don\u2019t let [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1799,9021,431,7544,534],"class_list":["post-38944","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubbles","tag-dollarcollapse-com","tag-interest-rates","tag-john-rubino","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38944"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38944\/revisions"}],"predecessor-version":[{"id":38945,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38944\/revisions\/38945"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}