The Fed announced today that they will slow down the rise of interest rates for the time being and not raise them as fast as they originally planned for 2019. However we are not out of the woods yet. Unemployment is lower today, but factor in the announcement of GM’s factory closings and we may have a new problem lurking ahead. Payroll is not keeping pace and the gap between workers payroll and the ability to pay for housing have become a huge problem.
Although banks are no longer allowing loans on good faith and you must have documentation to qualify for a home loan what is happening is that those that have loans are refinancing more than ever and they are not using the money on their homes. They are taking vacations, buying luxury items, and paying for medical bills.
Student debt from school loans are at an all time high with no sign of any way out for the younger generation to buy a home until much later in life. They are still living at home or renting. Car debt loans are also at an all time high. Keep an eye on the stock market and economy, but I do see some red flags to be aware of as we prepare to go through 2019.