The Housing Bubble 2.0

Please do not reply to this message. Replies to this message are routed to an unmonitored mailbox. You are receiving this email as a part of your subscription to Total Wealth. Your ability to alter your subscription information can be found at the bottom of this email. [Total Wealth] October 4, 2018 [As early as tomorrow's opening bell, this company could see a 59,845% revenue surge]( This [little-known startup]( scored the deal of a lifetime. And now, the fuse is lit for a stock price explosion like you've never witnessed before. This still isn't widely known - but it won't stay that way for long. [Go here now](. --------------------------------------------------------------- PREMIUM SERVICES [We're Closing Out for Double-Digit Gains]( Current Open Positions: 66 Number of Winning Plays 2018: 28 [Congrats on Your 38th Double-Digit Win of the Year]( Current Open Positions: 39 Number of Winning Plays 2018: 77 [Click here to watch the most recent Money Morning Fast Profits and automatically sign up for all future plays - free of charge]( IN THE MEDIA [The Real Problem with Elon Musk's Settlement Watch the full video here.](The Housing Bubble 2.0 Dear The Total Wealth Research Team, Alarming news came shooting through our monitors just a few days ago. You may have missed it, but you don't need to worry. We have you covered. The quiet headline passed through the media and slipped through many people's radars. Not ours though. In case you missed it, we summed it up for you: Denver's housing market is slowing because prices have become just too high for those wanting to move into the city. Downtown Denver is under so much construction that a local paper is broadcasting a "crane watch" feature, and the consensus is that most new homes will cost over $400,000. Builders themselves have said that they aren't able to sell the properties they're building for under $300,000 without government subsidies. You know the problem is bad when those same builders have become worried that the entire housing market might suffer because of these price hikes. Now, you may be thinking that this is Denver's problem. That rising costs are just a product of underproduction in the past few years. That this problem can't possibly emanate to anything more than that city and maybe the surrounding area. But you'd be wrong. This housing situation is a very small taste of what could be spreading to the rest of the country sometime soon, and the consequences could crash the entire U.S. economy - making the housing bubble in 2008 look like a cakewalk. There are three key puzzle pieces coming together, and if you don't listen now, this may be the last chance you have before your money and your livelihood dries up for good. #1 - Rising Interest Rates Just last Wednesday, Fed Chair Jerome Powell hiked interest rates for a third time this year. This time, he raised it by a quarter of a percentage point, leveling out to a range between 2% and 2.25%. [[WARNING](] The Clock Is Ticking for Our Nation's Economy Now, homes are becoming more expensive because paying back loans requires much more money on interest. This leads to a phenomenon that economists call the "lock-in effect": essentially, people who would want to sell their homes and upgrade decide not to - or simply can't afford to - because the interest rates are just too high. This Denver family's story, related by CNBC, perfectly highlights this expensive housing disaster. This family wanted a firm foothold in the Denver housing market, so they settled down in a three-bedroom ranch three years ago. They've been expanding their family, and are now expecting a new bundle of joy within the coming months. They wanted to upgrade their home, as any family would, but the interest rate was almost 5% -a whopping 1.5% higher, from when they purchased their ranch three years ago. Even if home prices had remained the same, they would still need to pay more every single month - and that money just isn't there for many families. But as we said a minute ago, even if these drastic measures are already being seen in Denver, the Fed doesn't just hike rates there - they are a federal institution, after all. National rising rates are just one piece of the formula that could spell out disaster ahead. #2 - Tariffs In other news, there's not a financial story nowadays that doesn't include the word "tariff" in the headlines. In this case, though, the timing has never been more relevant. Lumber tariffs from the President last year have contributed to this - and those imports coming from Canada in particular. Imports of Canadian lumber as a percentage of U.S. lumber production has been teetering on the line of 50% in recent years, and surpassing that benchmark right before 2016 struck. This has caused Canadian lumber prices to skyrocket to their highest levels - up 80% over the past year, reaching $655 per 1,000 board feet - in the past few years. The issue is that U.S. production hasn't been able to keep up, which is evident in the chart below: By now, I'm sure you can see why lumber prices at almost historical highs will spell out higher home prices. Only there's another wrinkle in the mix: U.S. Secretary of Commerce Wilbur Ross is reported in June to have said that "Home prices have risen by much more than the increase in lumber prices, and this is reflected in the strong profit margins of the home builders." So, while those profit margins are rising, our real concern is the national lumber tariffs - tariffs that have the potential to take down the entire U.S. economy. It's just one more piece to this complicated - and costly - puzzle. #3 - Slowing Wage Growth As we related toward the beginning of this column, most homes in Denver will cost over $400,000 once they hit the market. [[URGENT](] How to Score 44% Average Gains Per Day If that cost goes hand in hand with wage increases, then there shouldn't be an issue. But that's not the case. According to the national home price index, the S&P Case-Shiller, Denver home prices have increased 8% over the past year. Wage growth was only at 6%. If this goes on for much longer, the majority of the population will be shut out of the housing market entirely. And not just in Denver. This crisis will spread nationwide, city by city, spurred by the federal institution hiking interest rates across the country. And here's the most devastating part: that cost is necessary. According to the chief economist for Freddie Mac, Sam Khater, the homebuilders are "producing what they can produce. . . The problem is, it's uneconomic for them to produce affordable." This problem has led to a "big-city conundrum" is spreading to major cities across the U.S. The online real estate site Redfin has recently found that Denver is now on the same plane as Seattle and San Francisco, holding a "net outflow" of people; meaning more people are looking to leave the city than to move in. This prompted Redfin's chief executive to say that "City after city is going to face this. . . At some point, the buyers step back and say 'Enough is enough.'" Here's What You Need to Do This is a situation we've been documenting for a long time. And the news is just now coming to light. The truth is, America never really recovered from the Great Recession. And now, another economic event is about to rock our country to its very core. In fact, it will irreparably fracture America as we know it. The rising interest rates are just one crack in the economic demise of America. The tariffs are a chip and the slow wage growth are a fissure. America's economy is weakening before your very eyes. These are the warning signs, the writing on the wall, the flashing lights. It won't take much to bring the country to its knees...we're waiting on the proverbial straw that will break the camel's back. Your money - your income, livelihood, and profits - are at risk. You need to act now to protect yourself and your family from the financial storm that's about to hit. We got to work when we saw the initial signs and prepared a special survival kit just for you. It's now the only thing between financial security and the white-knuckle ride you and your money could take. [Just click here for more information](. Until next time, The Total Wealth Research Team --------------------------------------------------------------- More from Keith... [The Secret to Higher Returns]( Achieving higher returns is easier than you think. 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