The average American family is feeling quite disheartened, as the continuous interest rate hikes by the Federal Reserve have led to a significant drop in the U.S. stock market last year, resulting in a substantial shrinkage of stocks and fund assets in family wealth.

In the past two months, the U.S. stock market has barely managed a rebound, but the United States keeps making blunders, which could potentially lead to a substantial decline in the real estate owned by American families.

Let's take a look at the two strategies the U.S. has used to easily put real estate in more trouble than the subprime crisis, with one of them being closely related to China.

01, Asset Devaluation

Regarding the asset statistics report of the average American family, the latest data was released in December last year. The United States releases this data quarterly, and the next data will be available in March this year.

In this data, stock assets once again fell by $1.9 trillion, which is also a decrease in the net assets of American families after deducting various loans, especially mortgage and consumer loans, currently down to $143.3 trillion.

Compared to the market report released in September, Americans might have breathed a sigh of relief, as the previous report showed a significant reduction of $7.7 trillion in stock assets alone, much greater than the $1.9 trillion decrease this time.

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However, before this, the main reduction in assets was concentrated in stocks, and real estate had not yet been reflected.

Although since the second half of last year, the number of U.S. housing transactions has sharply decreased, and the median house price has also been continuously declining, but compared to 2021, the overall house prices are still on the rise.

However, entering 2023, there may not be such good fortune, as the higher base of house prices in 2022 means that this year's house prices will definitely see a larger decline compared to the previous year, especially after the United States has recently made a series of blunders.02, Prohibition of Chinese Buyers

Recently, there have been reports that several states in the United States are making a rather "strange" decision to prohibit Chinese individuals from purchasing real estate projects in the U.S., including residential properties, land, and other commercial properties.

The reason given is the absurd "national security concerns."

States that have clearly indicated such plans include Florida and Texas, among others.

Will this affect Chinese investments?

On the contrary!

As the U.S. continues to raise interest rates, Chinese buyers have been continuously leaving the market and selling off since last March, so the normal thinking should be to try to retain Chinese buyers and even attract more to support the U.S. real estate market.

However, what is unimaginable to economists is that, with the U.S. real estate market on the verge of a crash, several states are adding insult to injury, exacerbating the market situation.

Based on the latest data, the total value of real estate owned by U.S. households is $42 trillion. If Chinese buyers and other overseas buyers continue to leave the market and the volume of sales increases, it is very likely to accelerate the decline in U.S. housing prices.

According to predictions from Wall Street investment banks, the drop in 2023 could reach 15% to 20%, which means that U.S. households could lose up to $8 trillion just from this aspect.03, 42 trillion bombshell

Another misstep by the United States is that it continues to raise interest rates, which will inevitably push mortgage rates even higher.

Before 2008, U.S. interest rates were also on the rise, and it was during that time that the U.S. real estate market collapsed.

However, the Federal Reserve's tightening has not paused yet. After the Fed's continuous interest rate hikes, the 30-year loan interest rate in the United States could once again increase to over 7%.

Previously, U.S. housing prices have also experienced a consecutive six-month decline, and the alarm bells have been sounded.

During the process of falling housing prices, financial institutions collapse before homebuyers.

This is because most families have applied for a large amount of loans during the process of purchasing their homes. If they are unable to repay the loans, the corresponding insurance companies may have to pay compensation to the banks to cover the part of the loan that the homebuyers are unable to repay.

If the financial storm spreads to insurance institutions as a result, it would be identical to 2008.

Clearly, if U.S. housing prices plummet significantly this year, it will pose a great threat to the U.S. financial system.

The current M2 growth rate in the United States has already turned negative, and the printing of money has completely stopped. Without the support of a vast amount of funds, the danger to housing prices is growing, and it seems that another bombshell is getting closer and closer.