Consumers accumulated $2.1 trillion in surplus savings from reduced spending and direct government support during the pandemic in 2020 and 2021. They have been spending that money down, first on goods, and then on services, and have about $0.9 trillion left, Eisenberg said.
But inflation is gnawing away at those reserves and the current savings rate is near historic lows. Real income gains aren’t keeping up with high living costs and people are charging forward with credit, adding an average of $28 billion a month in consumer debt since last February, according toAdditionally, tighter monetary policy is chipping away at the wealth households accumulated during the pandemic.
Higher mortgage rates, which went from around 3% on a 30-year loan in late 2021 to more than 7% before settling back in the 6% range have killed off mortgage refinancings and greatly reduced affordability. That has decimated the mortgage industry and the pain is spreading to the larger real estate sector.
Home and condo sales last year fell 20% in metro Denver compared to 2021, and by December that decline was running closer to 40%, putting a huge dent in the volume of real estate transactions. Manufacturing in the U.S. is contracting, and the prices of some goods are starting to fall. Earlier this week, a survey of supply managers showed the services sector slipped into a contraction in December. If service spending continues to shrink, then a recession is not far away, Eisenberg said.
Not gonna end well. If you have cash and wanna buy-hold on! Your time is coming.
People are fleeing and y’all know it.
Economist predicts 10 of the last 2 recessions
Good so I can buy cheap
So what is this great economy the Biden administration keeps pushing on people?
Denver apartment prices are the same for Brooklyn. No one wants to spend $26000 for a one bedroom apartment
First it was “late 2022” then “early 2023”, now “middle of 2023”….
No one wants to go downtown. Any downtown
Maybe people won't be paying $100k+ over asking price for a house anymore.