Mortgage Payments

Housing Crash 2: We Have Never Seen Mortgage Delinquencies Rise This Fast In U.S. History

If our economic numbers were going to improve substantially, now would be the time for it to happen.  The COVID-19 pandemic seems to have hit a plateau for the moment, the civil unrest in our major cities has been reduced to a dull roar, and millions of Americans that originally lost their jobs have now gone back to work.  If we are going to get some glimmers of hope for the economy, this is when we should see them, because the environment does not look promising once the summer ends.  Unfortunately, the numbers that we keep getting just continue to directly contradict the narrative that any sort of a “recovery” is taking place.  In fact, the Mortgage Bankers Association is reporting that the delinquency rate on residential mortgages shot up a whopping 386 basis points last quarter…

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.22 percent of all loans outstanding at the end of the second quarter of 2020, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate increased 386 basis points from the first quarter of 2020 and was up 369 basis points from one year ago.

When I first saw that number, I could hardly believe it.

386 basis points in a single quarter?

I had never heard of such carnage before, and the Mortgage Bankers Association is telling us that this was “the biggest quarterly rise” in the history of their survey…

“The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” said Marina Walsh, MBA’s Vice President of Industry Analysis.

The delinquency rate on FHA loans is particularly troubling.

During the first quarter, the delinquency rate on FHA loans was 9.7 percent, but by the end of the second quarter that number had shot up to 15.7 percent…

Fast forward to today, when the dam of pent up mortgage delinquencies cracked some more, with the Federal Housing Administration reporting that its mortgages which represent the affordable path to homeownership for many first-time buyers, minorities and low-income Americans, now have the highest delinquency rate in at least four decades.

The share of delinquent FHA loans rose to 15.7% in the second quarter, up a whopping 60% from about 9.7% in the previous three months and the highest level in records dating back to 1979, the Mortgage Bankers Association said Monday. The delinquency rate for conventional loans, by comparison, was 6.7%.

We have never seen anything like this before, and these numbers seem to indicate that we are heading for a crisis that will be even worse than the subprime mortgage meltdown that we witnessed during the last recession.

Of course the reason why there are so many delinquencies is because tens of millions of Americans have lost their jobs in 2020.

According to the MBA, mortgage delinquency rates are shooting up the fastest in the states where the job losses have been the most severe…

Mortgage delinquencies track closely with the availability of jobs. The five states with the largest quarterly increases in delinquency rates were New Jersey, Nevada, New York, Florida, and Hawaii – all with a prevalence of leisure and hospitality jobs that were especially hard-hit by the COVID-19 pandemic.

The fastest way to fix this emerging crisis would be to get millions of newly unemployed Americans back to work as quickly as possible, and recently there has been some modest improvement in the employment numbers.

However, it is becoming very clear that millions upon millions of the jobs that have been lost during this pandemic are never coming back.  In fact, one recent survey found that almost half of all workers that have been laid off during this pandemic now consider their jobs losses to be permanent…

In April, roughly 2 in 10 households experiencing job loss considered their layoff permanent, while the remaining majority believed they would return to their former jobs within a few months. Now, as states have stalled or reversed reopening plans and the coronavirus outbreak worsens, nearly half of unemployed workers believe their jobs are not coming back, according to a poll from The Associated Press-NORC Center for Public Affairs Research.

What this means is that millions upon millions of Americans will continue to miss mortgage payments, and a massive wave of foreclosures looms in the months ahead.

Needless to say, it won’t be a happy time for our nation.

Meanwhile, more businesses are going belly up with each passing day.

For example, we just learned that as many as 300 Pizza Hut locations are going “to permanently close”…

Up to 300 Pizza Hut restaurants are slated to permanently close following the bankruptcy of one the chain’s largest franchisees.

NPC International, which filed for Chapter 11 in July, announced an agreement Monday with Pizza Hut’s owner Yum! Brands (YUM)to close roughly a quarter of its restaurants and sell the remaining locations. Specific restaurants and timing have not yet been determined, but NPC said a “substantial majority” of affected locations have dining rooms.

This is a great tragedy for those of us that love pizza, because out of all of the major pizza chains in the entire country nobody makes better pizza than Pizza Hut does.

And yes, I am being quite serious.

As soon as I could walk my parents began taking me to Pizza Hut, and I have been enjoying their pizza ever since.

Unfortunately, I don’t live anywhere near a Pizza Hut today, and so I don’t get to enjoy their pizza very often anymore.

In any event, a lot more companies are going to be waving the white flag in the months ahead.  Economic turmoil is one of the core pillars of “the perfect storm” that is now upon us, and after this current lull our economic problems are going to start accelerating once again.

Sadly, most Americans simply do not understand what is happening.

Most Americans still seem to think that everything is going to turn out just fine somehow.

What they don’t realize is that the whole system is starting to steadily unwind, and things are going to get really ugly as we continue down this road.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

The Housing Crisis Of 2020: Millions Of Americans Missed Their Last Rent Payments, And Tens Of Millions Could Soon Be Evicted

Week after week we continue to get economic numbers that are absolutely horrific, and it appears that we are heading for a housing crisis that will be even worse than what we witnessed in 2008.  Back then, millions of Americans lost their homes, but this time around it could be tens of millions.  I know that a statement like that may sound overly dramatic, but I believe that many of you that feel that way may change your minds after reading this entire article.

In order to make rent and mortgage payments, Americans need paychecks coming in, and right now people continue to lose jobs at a pace that is hard to believe.

On Thursday, we learned that another 1.3 million Americans filed new claims for unemployment benefits last week.  That was worse than expected, and it represented the 17th week in a row when the number of Americans filing new claims for unemployment benefits exceeded one million.

And as I keep reminding my readers each week, the all-time record for a single week prior to this year was just 695,000.

Overall, more than 51 million Americans have filed new claims for unemployment benefits over the last 17 weeks, and that is by far the largest spike in unemployment in all of U.S. history.

In fact, the numbers that we have been seeing should theoretically be close to impossible.  In February, the number of Americans that were employed peaked at an all-time high of 152 million, and the number of people that have filed new claims for unemployment since that time represents more than a third of that total.

I know that some people are hesitant to use the term “economic collapse”, but what else are we supposed to call this?

Incredibly, one expect quoted by USA Today is telling us that the number of Americans filing new claims for unemployment benefits could actually “increase” next week…

The rollbacks may spark a new wave of layoffs, especially in hard-hit states like Texas, Florida, Arizona and California, and possibly even push the claims totals higher.

“Next week could easily see an increase” in initial claims, economist Ian Shepherdson of Pantheon Macroeconomics wrote in a research note.

Needless to say, this tsunami of unemployment has resulted in a whole lot of people not being able to make their rent payments.

In fact, the Census Bureau has announced that 11.6 million Americans live in households that did not make their most recent rent payments…

According to the latest weekly Census Bureau data, 11.6 million people live in households that missed their last rental payments.

More than 22 million Americans also have no, or only slight confidence, that they will be able to make next month’s rental payments, the figures show.

Ouch.

Large numbers of Americans are getting behind on their mortgage payments as well.  The following comes from Wolf Richter…

In April, the share of all mortgages that were past due, but less than 30 days, soared to 3.4% of all mortgages, the highest in the data going back to 1999. This was up from 0.7% in April last year. During the Housing Bust, this rate peaked in November 2008 at 2%

In the months ahead, millions of Americans will fall so far behind on their rent payments that they will be facing eviction.

And millions of other Americans will fall so far behind on their mortgages that they will be in serious danger of losing their homes.

According to Emily Benfer, we could potentially see a total of “20 million to 28 million people” get kicked out of their homes in the months ahead…

“We have never seen this extent of eviction in such a truncated amount of time in our history,” Benfer said when asked about how the current homeless crisis compares to the 2008 housing crisis.

She continued: “We can expect this to increase dramatically in the coming weeks and months, especially as the limited support and intervention measures that are in place start to expire. About 10 million people, over a period of years, were displaced from their homes following the foreclosure crisis in 2008. We’re looking at 20 million to 28 million people in this moment, between now and September, facing eviction.”

We have never seen anything like this before.

And of course Benfer is assuming that there won’t be another major crisis between now and the end of the year.

So what happens if we get to September, October and November and things in this country start going absolutely haywire once again?

The closer we get to the election, the higher societal tensions will run, and they are already so high that we could see a major eruption at literally any moment.

And I should also mention that the $600 weekly bonus payments that were keeping so many unemployed Americans afloat will be terminated at the end of July.  Once those payments stop, millions upon millions of unemployed workers will have a much, much more difficult time making rent and mortgage payments.

Most Americans believe that “the worst is behind us”, but the truth is that we are sleepwalking into an unprecedented economic nightmare.

If you follow my work on The Most Important News, you already know how concerned I am about the end of this year and beyond, and I will be laying out precisely what I believe is coming in my new book which will be released later this month.

The “perfect storm” which I have mentioned so many times over the last couple of years is now here, and most Americans are completely and totally unprepared for it.

I would very much encourage you to take the summer months as an opportunity to make the preparations that you need to make for the chaos that is approaching.  As I detailed two days ago, we are already witnessing nationwide shortages of aluminum cans, soda, flour, canned soup, pasta and rice.  As the problems in our nation intensify, the shortages will only get worse.

Of course in order to store up supplies you must have somewhere to put them, and for tens of millions of Americans it is going to be a real struggle just to keep their homes during the months ahead.

It looks like we are facing a housing crisis that is going to be far worse than anything that we experienced during the last recession, and unless Congress starts making money rain from the sky it doesn’t appear that there is any hope of stopping it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

35 Reasons Why You Should Move Away From California

Wouldn’t it be wonderful if there was a “reboot” button for an entire state?  Because the truth is that if an entire state ever needed to completely start over it is the state of California.  At this point it has become the epicenter for just about everything that is wrong with America, and each year it just keeps coming up with new ways to become an even worse cesspool of social decay and depravity.  Millions of people have already left the state, and millions more are thinking of leaving.  One recent survey found that 47 percent of all Californians are thinking about moving out of the state in the next five years, and a different survey discovered that 53 percent of those currently living in the state would like to leave.  If about half the people in your state are seriously considering leaving, it is safe to say that things have gone horribly wrong.  But instead of changing course, those running California continue taking the state down a very self-destructive path.

It is such a shame, because California should be one of the greatest places in the world to live.  The weather is wonderful most of the year, the state still possesses extraordinary natural beauty, and the tech industry provides plenty of high paying jobs.

When I was growing up, millions of young Americans dreamed of moving there and living “the California dream”, and when I was a young man I seriously explored the possibility of moving there myself.

And the truth is that a lot of great things have come out of the state.  The following comes from a recent article by Ann Coulter…

In the last century, every great thing started in California: surfing, jeans, Disneyland, tax revolts, McDonald’s, movies, car culture, the Grateful Dead, right on red turns, Merle Haggard, skateboarding, Apple computer, and the last two elected Republican presidents not named “Bush.”

But now I don’t know why anyone would want to live there.

If you currently live in California, I am about to tell you a whole bunch of reasons why you should leave.  In fact, if I could get everybody to leave the state, I would.

However, if you feel specifically called to stay, then that is what you should do.  Without a doubt, light is needed the most where things are the darkest, and California needs as much light as it can get right now.

Unfortunately, I believe that it is too late for the state as a whole.  It is headed for a date with destiny, and most of the nearly 40 million people that live there have absolutely no idea what is coming.

If you live in the state and you do not know what you should do, I would get out while you still can.  The following are 35 reasons why you should move away from California…

1. Incredibly high taxes.  At this point, California has the highest marginal tax rate in the entire country.

2. Absurd housing costs.

3. The median home value in the state is now more than half a million dollars, and that is about twice as high as the national average.

4. It has been estimated that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco.

5. Endless wildfires.

6. Epic mudslides.

7. Horrific traffic jams.

8. Los Angeles has the worst traffic congestion in the entire world.

9. The education system is awful.

10. Medical tyranny.

11. One of the highest poverty levels in the United States.

12. Thousands of drug addicts are literally pooping in the streets.

13. Almost half of all the homeless people in the entire nation live in California.

14. The state is literally being overrun by millions of rats.

15. Los Angeles has been ranked as the second most rat-infested city in the country.

16. At this point things are so bad that even Los Angeles City Hall is being overrun by rats.

17. Illegal immigration is out of control, and the sanctuary cities in California are making things even worse.

18. Rising gang activity.

19. High crime rates.

20. There is now a law in California that protects shoplifters.  So for those that enjoy shoplifting, this might actually be a reason to move into the state.

21. The drug war that has been raging in Mexico is increasingly spilling across the border.

22. California has been ranked as the worst state in the nation to do business year after year.

23. California is also one of the most litigious states in the entire country.

24. The once pristine beaches in the state are now being “completely overrun with fecal bacteria”.

25. Nancy Pelosi.

26. Kamala Harris.

27. Governor Gavin Newsom.

28. The lieutenant governor, the attorney general, the secretary of state and the state treasurer are all Democrats.

29. Democrats make up nearly two-thirds of the California State Senate.

30. Democrats make up more than two-thirds of the California State Assembly.

31. Both of the U.S. senators and 46 out of the 53 members of the House of Representatives that California sends to Washington are Democrats.

32. Much of the population is openly hostile to those that identify as conservatives.

33. California has been on the cutting edge of America’s moral decay for decades.

34. There have been more than 100,000 earthquakes in the state so far this year.

35. One day the “Big One” will hit California, and the geography of the state will be dramatically altered.  The devastation will be unlike anything we have ever witnessed, and the death toll will be unimaginable.

If Donald Trump wins the next presidential election, there is a group of activists in California that plan to get a “Calexit” referendum on the ballot for the following election.

Those activists don’t want to be part of a country that would elect Trump two times, because they consider their values to be completely and utterly incompatible with Trump’s values.

But what is happening in this nation is far bigger than just Trump.

To me, it would be wonderful if the rest of the nation decided that their values were completely and utterly incompatible with California’s values.  We desperately need to turn America around, and the way to do that is to head in a completely opposite direction from the way that California is going.

Sadly, it does not appear that is going to happen.  California may be racing ahead of most of the rest of the country, but our final destination will be the same.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

It Is Time To Go: Over Half Of All California Voters “Have Considered Leaving The State”

Why in the world does anyone still want to live in California?  Great weather and good paying jobs are the two biggest positives that residents often point out, but the high cost of living and the absolutely ridiculous housing prices often eat up all of the extra money that Californians think that they are making.  In fact, it was recently reported that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco.  If you have a ton of money, it can partially insulate you from the problems that are increasingly ravaging the state, but unless you never go out in public nothing is going to insulate you completely.  Cities all over the state are degenerating into drug-infested, crime-ridden hellholes that are literally being overrun by millions of rats.  California has some of the worst traffic in the entire world, unchecked illegal immigration is causing a whole host of social problems, and gang activity has become a massive problem.  On top of everything else, California is being constantly hit by wildfires, mudslides, earthquakes and other natural disasters.  In fact, scientists tell us that it is just a matter of time before “the Big One” hits, and that is probably one of the best reasons to leave California while you still can and never look back.

Yes, there are some California residents that continue to insist that it is a great place to live.

But if California is so wonderful, why have more than half of all California voters “considered leaving the state”?  The following comes from the Los Angeles Times…

Just over half of California’s registered voters have considered leaving the state, with soaring housing costs cited as the most common reason for wanting to move, according to a new poll.

Young voters were especially likely to cite unaffordable housing as a reason for leaving, according to the latest latest UC Berkeley Institute of Governmental Studies poll conducted for the Los Angeles Times. But a different group, conservatives, also frequently suggested they wanted to leave — and for a very different reason: They feel alienated from the state’s political culture.

With the way the state is being run, conservatives have been moving out of California in large numbers for years.  In fact, I have a number of really good friends that left the state for political reasons and will never return.

On the other hand, California’s reputation for handing out free goodies has been a magnet for another class of people.  Today, almost half of all homeless people in the entire nation live in the state of California, and this has become such a huge crisis that it literally makes headlines all over the globe.

For example, the following comes from an article in a British news source…

Cali Carlisle admits she is a heroin addict — ‘but in a healthy way,’ she insists, even if the visual evidence belies that claim.

Her nose is the brightest shade of red imaginable. She constantly picks at scabs all over her body. Her home is a makeshift bed beneath Interstate 80 in Sacramento.

And Monday was her 26th birthday. Not that you would ever guess. Anyone looking at her would think she is at least 15 years older.

This is the cold, hard reality of the glorious drug lifestyle that so many go to California to experience.

Every year, thousands upon thousands of young people that once had bright futures ahead of them end up on the streets, in prison or dead due to this raging epidemic.

And one of the places where it is the worst is in the capital of the state itself.  Not too long ago, a salon owner in Sacramento made headlines all over the nation when her rant about homelessness on social media went viral…

“I just want to tell you what happens when I get to work,” stated Liz Novak, a local salon owner, to the media about what she’s had to deal with trying to conduct business in Sacramento.

“I have to clean up the poop and the pee off of my doorstep. I have to clean-up the syringes. I have to politely ask the people who I care for – I care for these people that are homeless – to move their tents out of the way of the door to my business.”

She ultimately had to move her salon completely because it became clear that things were not going to get better any time soon.

In the state of California today, virtually everything has been defiled.

At one time, California was teeming with natural beauty.  But today the entire state has become a trash dumpster, and that includes California’s once pristine beaches.  Just check out what Dr. Drew Pinsky recently told Laura Ingraham…

“There is an organization out here called Heal the Bay which keeps tabs on safety of our beaches in Southern California, from Orange County to Ventura. Since the rains last Winter, [Heal the Bay] has been giving our beaches C’s to F’s, and F means completely overrun with fecal bacteria. What comes with that are other things like syringes, Hepatitis A and other infectious diseases.”

On top of everything else, seismic activity is a constant threat.

There have been more than 1,500 earthquakes in California and Nevada over the past 7 days, and these days that is considered to be a slow week.

Of course most of the earthquakes are very small, but scientists assure us that one of these days “the Big One” will hit the state.  When that day arrives, the geography of the state will be radically changed, and the death and destruction will be off the charts.

We live at a time when our planet is being greatly shaken, and many believe that what we have seen so far is just the beginning.

The coastline of the state of California lies directly along the infamous “Ring of Fire”, and scientists have been persistently warning us that the San Andreas fault is “locked and loaded” and could possibly “unzip all at once”.

It is such a shame what has happened to the state.  California should be one of the most beautiful, prosperous and enjoyable places to live in the entire world.  Unfortunately, Californians have been making exceedingly poor choices for decades, and the consequences of those decisions will be extremely bitter indeed.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time. Of course the most important thing that we can share with people is the gospel of Jesus Christ, and if you would like to learn more about how you can become a Christian I would encourage you to read this article.

California Nightmare: Over Half Of The People Living In The State Wish They Could Leave

This just shows what can happen when you let crazy people run a state for several decades.  In the 1960s and 1970s, the possibility of moving to the west coast was “the California dream” for millions of young Americans, but now “the California dream” has turned into “the California nightmare”.  According to a brand new survey, 53 percent of those living in California are considering leaving the state, and there are certainly lots of reasons to hit the road and never look back.  The cities are massively overcrowded, California has the worst traffic in the western world, drug use and illegal immigration both fuel an astounding amount of crime, tax rates are horrendous and many of the state politicians appear to literally be insane.  And on top of all that, let us not forget the earthquakes, wildfires and landslides that are constantly making headlines all over the world.  Last year was the worst year for wildfires in California history, and these days it seems like the state is hit by some new crisis every few weeks.

But none of those factors are the primary reason why so many people are eager to leave.

According to a brand new survey by Edelman Intelligence, the main reason why so many are considering leaving the state is the high cost of living…

A growing number of Californians are contemplating moving from the state — and not due to wildfires or earthquakes but the sky-high cost of living, according to a survey released Wednesday.

The online survey, conducted last month by Edelman Intelligence, found that 53 percent of Californians surveyed are considering fleeing, representing a jump over the 49 percent polled a year ago. The desire to exit the nation’s most populous state was highest among millennials, the survey noted.

Thanks to absolutely ridiculous construction restrictions, it has become increasingly difficult to build new housing units in the state.  But meanwhile, people from all over the world continue to move there because they are attracted by what they see on television.

As a result, the supply of housing has not kept up with demand, and prices have shot through the roof in recent years.  The following numbers come from CNBC…

Statewide, the median home value in California was $547,400 at the end of 2018, while the U.S. median home value was $223,900. By comparison, the median home value in New York state stood at $289,000 and $681,500 in New York City; New Jersey was $324,700.

Yes, there are a lot of good paying jobs in California, but you better have a really, really good job to be able to afford mortgage payments on a home worth half a million dollars.

Of course many Californians find themselves greatly stretched financially by out of control housing costs, and so more of them than ever are moving in with roommates.  In fact, one recent report found that the number of married couples in the U.S. that are living with roommates “has doubled since 1995”…

The number of married couples living with roommates has doubled since 1995, according to a recent report from real estate site Trulia. About 280,000 married people now live with a roommate — and that’s particularly true in pricey cities like those on the West Coast.

The reason: Housing costs a ton. In Honolulu and Orange Country, Calif., the share of married couples with roommates is between four and five times the national rate. San Francisco, Los Angeles, San Diego and Seattle also have sky high rates of married couples with roomies. Those same cities all have well above average rental and housing costs (Trulia notes that housing costs in all these markets have risen more than 30% since 2009), with residents of uber-pricey San Francisco requiring more than $123,000 in income to live comfortably, one study showed.

In addition to housing costs, many Californians are greatly frustrated by the oppressive levels of taxation in the state.

At this point, the state has the highest marginal tax rate in the entire country…

At 12.3 percent, California led the 50 states in 2018 with the highest top marginal tax rate, according to the Federation of Tax Administrators. And that doesn’t include an additional 1-percent surcharge for those Californians with incomes of $1 million or more.

Ouch.

But at least the weather is nice.

Yesterday, I wrote an article entitled “Rats, Public Defecation And Open Drug Use: Our Major Western Cities Are Becoming Uninhabitable Hellholes”, and it sparked something of a firestorm.  More than 1000 comments have already been posted on that article, and a few hearty individuals actually tried to convince the rest of us that life on the west coast is not actually all that bad.

I’m sorry, but if your city has far more intravenous drug users than it does high school students, that is not somewhere that I would want to raise a family…

According to a report from the Chronicle, San Francisco now has more intravenous drug users than high school students. San Francisco, which operates 15 high schools, currently has 16,000 students enrolled grades nine through twelve.

By comparison, the northern California city currently has 24,500 “injection drug users.” That is approximately 8,500 more drug users than high school students.

As I mentioned yesterday, the city of San Francisco gave out 5.8 million free syringes to drug users last year.

When you have such widespread drug use, people are going to commit a lot of crime and they are going to do some really weird things.  Just consider the following example…

Authorities are searching for a man seen on security footage licking the doorbell of a California home and relieving himself in the family’s yard.

Police have identified the man as Roberto Arroyo, 33, and say that he spent three hours around the Salinas home of Sylvia and Dave Dungan.

The couple had been out of town, during the strange incident, but their children were sleep inside the family’s home. They noticed something amiss when they woke up to multiple alerts from their surveillance system, which notifies the homeowners whenever there is movement near the front door.

A lot of really good people used to live in California, but they left because of stupid stuff like this.

In fact, quite a few of my best friends are people that have moved out of the state within the last 10 years.

Over the past decade we have seen a mass exodus out of California.  And according to Kristin Tate, the author of a new book entitled “How Do I Tax Thee?: A Field Guide to the Great American Rip-Off“, the “upper-middle class” has been moving out of the state faster than anyone else…

The largest socioeconomic segment moving from California is the upper-middle class. The state is home to some of the most burdensome taxes and regulations in the nation. Meanwhile, its social engineering — from green energy to wealth redistribution — have made many working families poorer. As California begins its long decline, the influx outward is picking up in earnest.

Overall, approximately 5 million people have packed up and permanently moved out of California within the last 10 years.

Unfortunately, the entire nation is slowly becoming just like California, and if we don’t turn things around eventually there will be no place left to go.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

12 Reasons Why The Federal Reserve May Have Just Made The Biggest Economic Mistake Since The Last Financial Crisis

Wrong Way Signs - Public DomainHas the Federal Reserve gone completely insane?  On Wednesday, the Fed raised interest rates for the second time in three months, and it signaled that more rate hikes are coming in the months ahead.  When the Federal Reserve lowers interest rates, it becomes less expensive to borrow money and that tends to stimulate more economic activity.  But when the Federal Reserve raises rates , that makes it more expensive to borrow money and that tends to slow down economic activity.  So why in the world is the Fed raising rates when the U.S. economy is already showing signs of slowing down dramatically?  The following are 12 reasons why the Federal Reserve may have just made the biggest economic mistake since the last financial crisis…

#1 Just hours before the Fed announced this rate hike, the Federal Reserve Bank of Atlanta’s projection for U.S. GDP growth in the first quarter fell to just 0.9 percent.  If that projection turns out to be accurate, this will be the weakest quarter of economic growth during which rates were hiked in 37 years.

#2 The flow of credit is more critical to our economy than ever before, and higher rates will mean higher interest payments on adjustable rate mortgages, auto loans and credit card debt.  Needless to say, this is going to slow the economy down substantially…

The Federal Reserve decision Wednesday to lift its benchmark short-term interest rate by a quarter percentage point is likely to have a domino effect across the economy as it gradually pushes up rates for everything from mortgages and credit card rates to small business loans.

Consumers with credit card debt, adjustable-rate mortgages and home equity lines of credit are the most likely to be affected by a rate hike, says Greg McBride, chief analyst at Bankrate.com. He says it’s the cumulative effect that’s important, especially since the Fed already raised rates in December 2015 and December 2016.

#3 Speaking of auto loans, the number of people that are defaulting on them had already been rising even before this rate hike by the Fed…

The number of Americans who have stopped paying their car loans appears to be increasing — a development that has the potential to send ripple effects through the US economy.

Losses on subprime auto loans have spiked in the last few months, according to Steven Ricchiuto, Mizuho’s chief US economist. They jumped to 9.1% in January, up from 7.9% in January 2016.

“Recoveries on subprime auto loans also fell to just 34.8%, the worst performance in over seven years,” he said in a note.

#4 Higher rates will likely accelerate the ongoing “retail apocalypse“, and we just recently learned that department store sales are crashing “by the most on record“.

#5 We also recently learned that the number of “distressed retailers” in the United States is now at the highest level that we have seen since the last recession.

#6 We have just been through “the worst financial recovery in 65 years“, and now the Fed’s actions threaten to plunge us into a brand new crisis.

#7 U.S. consumers certainly aren’t thriving, and so an economic slowdown will hit many of them extremely hard.  In fact, about half of all Americans could not even write a $500 check for an unexpected emergency expense if they had to do so right now.

#8 The bond market is already crashing.  Most casual observers only watch stocks, but the truth is that a bond crash almost always comes before a stock market crash.  Bonds have been falling like a rock since Donald Trump’s election victory, and we are not too far away from a full-blown crisis.  If you follow my work on a regular basis you know this is a hot button issue for me, and if bonds continue to plummet I will be writing quite a bit about this in the weeks ahead.

#9 On top of everything else, we could soon be facing a new debt ceiling crisis.  The suspension of the debt ceiling has ended, and Donald Trump could have a very hard time finding the votes that he needs to raise it.  The following comes from Bloomberg…

In particular, the markets seem to be ignoring two vital numbers, which together could have profound consequences for global markets: 218 and $189 billion. In order to raise or suspend the debt ceiling (which will technically be reinstated on March 16), 218 votes are needed in the House of Representatives. The Treasury’s cash balance will need to last until this happens, or the U.S. will default.

The opening cash balance this month was $189 billion, and Treasury is burning an average of $2 billion per day – with the ability to issue new debt. Net redemptions of existing debt not held by the government are running north of $100 billion a month. Treasury Secretary Steven Mnuchin has acknowledged the coming deadline, encouraging Congress last week to raise the limit immediately.

If something is not done soon, the federal government could be out of cash around the beginning of the summer, and this could create a political crisis of unprecedented proportions.

#10 And even if the debt ceiling is raised, that does not mean that everything is okay.  It is being reported that U.S. government revenues just experienced their largest decline since the last financial crisis.

#11 What do corporate insiders know that the rest of us do not?  Stock purchases by corporate insiders are at the lowest level that we have seen in three decades…

It’s usually a good sign when the CEO of a major company is buying shares; s/he is an insider and knows what’s going on, so their confidence is a positive sign.

Well, according to public data filed with the Securities and Exchange Commission, insider buying is at its LOWEST level in THREE DECADES.

In other words, the people at the top of the corporate food chain who have privileged information about their businesses are NOT buying.

#12 A survey that was just released found that corporate executives are extremely concerned that Donald Trump’s policies could trigger a trade war…

As business leaders are nearly split over the effectiveness of Washington’s new leadership, they are in unison when it comes to fears over trade and immigration. Nearly all CFOs surveyed are concerned that the Trump administration’s policies could trigger a trade war between the United States and China.

A decline in global trade could deepen the economic downturns that are already going on all over the planet.  For example, Brazil is already experiencing “its longest and deepest recession in recorded history“, and right next door people are literally starving in Venezuela.

After everything that you just read, would you say that the economy is “doing well”?

Of course not.

But after raising rates on Wednesday, that is precisely what Federal Reserve Chair Janet Yellen told the press…

“The simple message is — the economy is doing well.” Federal Reserve Chair Janet Yellen said at a news conference. “The unemployment rate has moved way down and many more people are feeling more optimistic about their labor prospects.”

However, after she was challenged with some hard economic data by a reporter, Yellen seemed to change her tune somewhat…

Well, look, our policy is not set in stone. It is data- dependent and we’re — we’re not locked into any particular policy path. Our — you know, as you said, the data have not notably strengthened. I — there’s noise always in the data from quarter to quarter. But we haven’t changed our view of the outlook. We think we’re on the same path, not — we haven’t boosted the outlook, projected faster growth. We think we’re moving along the same course we’ve been on, but it is one that involves gradual tightening in the labor market.

Just like in 2008, the Federal Reserve really doesn’t understand the economic environment.  At that time, Federal Reserve Chair Ben Bernanke assured everyone that there was not going to be a recession, but when he made that statement a recession was actually already underway.

And as I have said before, I wouldn’t be surprised in the least if it is ultimately announced that GDP growth for the first quarter of 2017 was negative.

Whether it happens now or a bit later, the truth is that the U.S. economy is heading for a new recession, and the Federal Reserve has just given us a major shove in that direction.

Is the Fed really so clueless about the true state of the economy, or could it be possible that they are raising rates just to hurt Donald Trump?

I don’t know the answer to that question, but clearly something very strange is going on…

How The Federal Reserve Is Setting Up Trump For A Recession, A Housing Crisis And A Stock Market Crash

Janet Yellen - Public DomainMost Americans do not understand this, but the truth is that the Federal Reserve has far more power over the U.S. economy than anyone else does, and that includes Donald Trump.  Politicians tend to get the credit or the blame for how the economy is performing, but in reality it is an unelected, unaccountable panel of central bankers that is running the show, and until something is done about the Fed our long-term economic problems will never be fixed.  For an extended analysis of this point, please see this article.  In this piece, I am going to explain why the Federal Reserve is currently setting the stage for a recession, a new housing crisis and a stock market crash, and if those things happen unfortunately it will be Donald Trump that will primarily get the blame.

On Wednesday, the Federal Reserve is expected to hike interest rates, and there is even the possibility that they will call for an acceleration of future rate hikes…

Economists generally believe the central bank’s median estimate will continue to call for three quarter-point rate increases both this year and in 2018. But there’s some risk that gets pushed to four as inflation nears the Fed’s annual 2% target and business confidence keeps juicing markets in anticipation of President Trump’s plan to cut taxes and regulations.

During the Obama years, the Federal Reserve pushed interest rates all the way to the floor, and this artificially boosted the economy.  In a recent article, Gail Tverberg explained how this works…

With falling interest rates, monthly payments can be lower, even if prices of homes and cars rise. Thus, more people can afford homes and cars, and factories are less expensive to build. The whole economy is boosted by increased “demand” (really increased affordability) for high-priced goods, thanks to the lower monthly payments.

Asset prices, such as home prices and farm prices, can rise because the reduced interest rate for debt makes them more affordable to more buyers. Assets that people already own tend to inflate, making them feel richer. In fact, owners of assets such as homes can borrow part of the increased equity, giving them more spendable income for other things. This is part of what happened leading up to the financial crash of 2008.

But the opposite is also true.

When interest rates rise, borrowing money becomes more expensive and economic activity slows down.

For the Federal Reserve to raise interest rates right now is absolutely insane.  According to the Federal Reserve Bank of Atlanta’s most recent projection, GDP growth for the first quarter of 2017 is supposed to be an anemic 1.2 percent.  Personally, it wouldn’t surprise me at all if we actually ended up with a negative number for the first quarter.

As Donald Trump has explained in detail, the U.S. economy is a complete mess right now, and we are teetering on the brink of a new recession.

So why in the world would the Fed raise rates unless they wanted to hurt Donald Trump?

Raising rates also threatens to bring on a new housing crisis.  Interest rates were raised prior to the subprime mortgage meltdown in 2007 and 2008, and now we could see history repeat itself.  When rates go higher, it becomes significantly more difficult for families to afford mortgage payments…

The rate on a 30-year fixed mortgage reached its all-time low in November 2012, at just 3.31%. As of this week, it was 4.21%, and by the end of 2018, it could go as high as 5.5%, forecasts Matthew Pointon, a property economist for Capital Economics.

He points out that for a homeowner with a $250,000 mortgage fixed at 3.8%, annual payments are $14,000. If that homeowner moved to a similarly-priced home but had a 5.5% rate, their annual payments would rise by $3,000 a year, to $17,000.

Of course stock investors do not like rising rates at all either.  Stocks tend to rise in low rate environments such as we have had for the past several years, and they tend to fall in high rate environments.

And according to CNBC, a “coming stock market correction” could be just around the corner…

Investors are in for a rude awakening about a coming stock market correction — most just don’t know it yet. No one knows when the crash will come or what will cause it — and no one can. But what’s worse for most investors is they have no clue how much they stand to lose when it inevitably happens.

“If you look at the market historically, we have had, on average, a crash about every eight to 10 years, and essentially the average loss is about 42 percent,” said Kendrick Wakeman, CEO of financial technology and investment analytics firm FinMason.

If stocks start to fall, how low could they ultimately go?

One technical analyst that has a stunning record of predicting short-term stock market declines in recent years is saying that the Dow could potentially drop “by more than 6,000 points to 14,800”…

But if the technical stars collide, as one chartist predicts, the blue-chip gauge could soon plunge by more than 6,000 points to 14,800. That’s nearly 30% lower, based on Friday’s close.

Sandy Jadeja, chief market strategist at Master Trading Strategies, claims several predicted stock market crashes to his name — all of them called days, or even weeks, in advance. (He told CNBC viewers, for example, that the August 2015 “Flash Crash” was coming 18 days before it hit.) He’s also made prescient calls on gold and crude oil.

And he’s extremely concerned about what this year could bring for investors. “The timeline is rapidly approaching” for the next potential Dow meltdown, said Jadeja, who shares his techniques via workshops and seminars.

Most big stock market crashes tend to happen in the fall, and that is what I portray in my novel, but the truth is that they can literally happen at any time.  If you have not seen my recent rant about how ridiculously overvalued stocks are at this moment in history, you can find it right here.  Whether you want to call it a “crash”, a “correction”, or something else, the truth is that a major downturn is coming for stocks and the only question is when it will strike.

And when things start to get bad, most of the blame will be dumped on Trump, but it won’t primarily be his fault.

It was the Federal Reserve that created this massive financial bubble, and they will also be responsible for popping it.  Hopefully we can get the American people to understand how these things really work so that accountability for what is coming can be placed where it belongs.

Does This Look Like A Housing Recovery To You?

Homeownership Rate 2014We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years.  But of course this is not a new trend.  As you will see in this article, the homeownership rate in the United States has been in a continual decline for more than 7 years.  Obviously this is not a sign of a healthy economy.  Traditionally, homeownership has been one of the key indicators that you belong to the middle class.  When people define “the American Dream”, it is usually one of the first things mentioned.  So if the percentage of Americans that own a home has been steadily going down for 7 years in a row, what does that tell us about the health of the middle class in this country?

The chart that you are about to view is clear evidence that we are in the midst of a long-term economic decline.  It shows what has happened to the homeownership rate in the U.S. since the year 2000, and as you can see it has been collapsing since the peak of the housing market back in 2007.  Does this look like a housing recovery to you?…

Homeownership Rate 2014

So many people get caught up in what is happening on Wall Street, but this is the “real economy” that affects people on a day to day basis.

Most Americans just want to be able to buy a home and provide a solid middle class living for their families.

The fact that the percentage of people that are able to achieve this “American Dream” is falling rapidly is very troubling.

There are some that blame this stunning decline in the homeownership rate on the Millennials.

And without a doubt, they are a significant part of the story.  They are moving back home with their parents at record rates, and many that are striking out on their own are renting apartments in the big cities.

This is one area where the decline of marriage in America is really hitting the economy.  Back in 1968, well over 50 percent of Americans in the 18 to 31-year-old age bracket were already married and living on their own.  Today, that number is below 25 percent.

But that is not all there is to this story.

In fact, the homeownership rate for Americans in the 35 to 44-year-old age bracket has been falling even faster than it has for Millennials…

In the first quarter of 2008, nearly 67% of people aged 35-44 owned homes. Now the number is barely above 59%. The percentage of people under 35 owning homes only fell five percentage points, to 36% from 41%.

So why is this happening?

Well, it is fairly simple actually.

In order to buy homes, people need to have good jobs.  And at this point, the percentage of Americans that are employed is still about where it was during the depths of the last recession.

In addition, wages in the United States have stagnated and the quality of our jobs continues to go down.  As I wrote about the other day, half of all American workers make less than $28,031 a year.  Needless to say, if you make less than $28,031  a year, you are going to have a really hard time getting approved for a home loan or making mortgage payments.

Things have been changing for a long time in this country, and not for the better.  Our economic problems have taken decades to develop, and the underlying causes of these problems is still not being addressed.

Meanwhile, middle class families continue to suffer.  One very surprising new survey discovered that more than half of all Americans now consider themselves to be “lower-middle class or working class with low economic security”.  While Wall Street has been celebrating in recent years, economic pessimism has become deeply ingrained on Main Street…

Optimism may be harder to come by these days. More than half of Americans surveyed in a Harris poll released Tuesday identified themselves as being lower-middle class or working class with low economic security. And 75 percent said they’re being held back financially by roadblocks like the cost of housing (24 percent), health care (21 percent) and credit-card debt (20 percent).

And that’s not the kicker.

“The most disappointing aspect is that 45 percent think they’ll never get their finances back to where they were before the financial crisis,” said Ken Rees, CEO of the Elevate credit service company, which commissioned the survey. “And a third are losing sleep over it.”

The only “recovery” that we have experienced since the last recession has been a temporary recovery on Wall Street.

For the rest of the country, our long-term economic decline has continued.

When I was growing up, my father was serving in the U.S. Navy and we lived in a fairly typical middle class neighborhood.  Everyone that I went to school with lived in a nice home and I never heard of any parent struggling to find work.  Of course life was not perfect, but it seemed to me like living a middle class lifestyle was “normal” for most people.

How times have changed since then.

Today, it seems like we are all part of a giant reality show where people are constantly being removed from the middle class and everyone is wondering who will be next.

So what do you think?

Is there hope for the middle class, or are the economic problems that we are facing just beginning?

Please feel free to share your opinion by posting a comment below…

 

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