Part 6/13:
Mortgage rates have surged to around 7%, doubling from under 3% in late 2021, severely impacting affordability.
The spread between mortgage rates and the 10-year treasury is widening due to decreased buying activity, indicating a liquidity crunch and heightened investor risk aversion.
Existing home sales have plummeted by around 21.6% nationwide in September, with local markets dipping even more, signaling a tough few months ahead.
Industry Impacts
The real estate sector contributes about 17% of U.S. GDP, encompassing home sales, construction, and related financial services.
Real Estate Investment Trusts (REITs), often viewed as safe income vehicles, have suffered heavy losses—some down 45-61% since the start of the year—reflecting broad market distress.