The US is on the verge of a historic housing crash and it will destroy the global economy

The US is on the verge of a historic housing crash and it will destroy the global economy<br><br>Wherever you see the Great Depression of the 1930s mentioned, replace it with the coming Great Depression of the 2020s. That's the conclusion I've come to after reading the latest data on the US and global economies.<br><br>Just look at the facts: the sharpest interest rate hike in the US in 40 years has led to thousands of mortgage companies going bankrupt, with the total number of bankruptcies reaching 175 over the past five months.<br><br>Meanwhile, the number of foreclosures in August jumped by 50% year-over-year and 39% month-over-month, the biggest increase in 14 years.<br><br>The impact of this is being felt in the market, as house prices in California have fallen by 19.2% over the past year.<br><br>According to Zillow, house prices have also plummeted in previously unaffordable US cities such as San Francisco, Seattle, Boston, and New York.&#x200B;<br><br>This past July, the median home price in the US dropped below $400,000 for the first time in 15 months. Meanwhile, the seasonally-adjusted pace of existing home sales plummeted by 14.6% YoY and 3.6% MoM in July as well.<br><br>The median household income is $70,784. For someone to afford a home valued at $400,000 or more, they would need to make at least 150% of that median household income in order to even be considered for a mortgage. The Federal Reserve is on track to continue raising interest rates through the end of 2023 and into 2024. With that, the average 30-year mortgage rate will surpass 9%, pricing even more Americans out of the housing market. If someone wants to be considered for a home valued at $500,000 or more, they would need to make at least 175% to 200% of the median household income. This would effectively price-out 75% to 85% of Americans from being able to acquire a mortgage.<br><br>Where does the US economy go from here? Can they afford to let property prices drop by 30% to 40%? And if they don't want a housing crash of that scale, how will they prevent it? <br><br>Given the situation, the US is likely to take aggressive measures to prevent a housing market crash, but at the same time, how will it balance its inflation? The current interest rate hike cycle is likely to continue for a long time, and the US will likely face a serious housing crisis in the future. As the global economy takes off from the US, a housing market crisis in the US can be expected to have a huge impact on the global economy, and the global economy is likely to experience a serious crisis.<br><br>In this case, only China can save the global economy. If China can achieve hyper-growth, it will have enough capacity to pull the entire global economy out of a depression. But will China be able to achieve that? If China is unable to achieve high growth, a depression is likely to come sooner rather than later.