You’ve never seen anything like this.
The market top of 2021-early 2022 will look like child’s play when the last stage of the 18.6-year cycle unfolds.
It will be bigger than the euphoria before the Great Recession… bigger than the crypto bubble…
It will be everywhere.
And I’m seeing signs that it has begun.
100% Mortgages Are Back
The effects of the 18.6-year cycle coming to an end will shake the world.
And you need to watch what’s going on around the globe to see the signs.
The latest one popped up in the United Kingdom, where, for the first time since 2008, lenders are offering potential homebuyers 100% loan-to-value mortgages.
Mortgage lenders are set to start offering 100 per cent home loans again for the first time since the 2008 financial crisis.
Skipton Building Society is to launch loans for first-time buyers who do not have a deposit. Precise details on the mortgage remain under wraps, but borrowers will need to demonstrate a history of paying rent comparable to mortgage repayments for up to two years. The deal will be fixed for over two years to guard against the risk of borrowers ending up in negative equity.
Buying a home has become so difficult that banks will have to come up with every incentive they can.
So now, new homebuyers won’t even need to put a deposit down on their property.
But it won’t end here.
Here’s What Happens Next
Some of the world’s craziest real estate markets taught me this lesson.
Once you start overleveraging, you will never stop.
Leverage is like a drug. If you use it once and it doesn’t immediately kill you, you’ll be hooked.
One hundred percent will become the new normal on both sides of the Atlantic…
And banks will soon realize that the more new credit they create, the more profitable they become.
Right now, U.S. consumers and homebuyers have high credit scores. Their household balance sheets are in good shape.
But home prices are soaring… in 2002, the average home price was a little above $150,000. In 2022, it was about $350,000.
Meanwhile, the personal savings rate, at 5.1%, is way below its historical average of 9%.
In other words…
First-time homebuyers don’t save enough for a down payment.
What’s the solution?
More leverage… fueling bank profits… driving house prices further up… and creating a bubble of historic proportions.
The first signs are here.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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