The Wells Fargo Housing Market Index is now below where it was in May 2006, en route to the housing crisis.
With an interest rate of 6%, the monthly mortgage for a $500,000 home is 40% higher than it was 1 year ago. The payment is doubled with 10% interest.
“BIS backs ‘tense’ rate hikes despite rising recession risk”
LONDON (Reuters) – The world’s central bank’s umbrella body, the Bank for International Settlements (BIS), has urged major economies to press ahead with sharp interest rate hikes despite the growing threat of recession and volatility of the foreign exchange market.
The Swiss-based BIS’s quarterly report acknowledged recession and debt risks were rising, but said a recovery in global inflation remained paramount.
“It is important to act in a timely and forceful manner,” said the head of the BIS’s Economic and Monetary Department, Claudio Borio. “The front loading (of rate hikes) tends to reduce the likelihood of a hard landing.”