The local Branch Manager of where I bank had some sobering news last Fall.

Real Estate is always local. In our area the mkt peaked in Feb 2022. Went sideways for the rest of the year as not much sold. Presently we are down 10-20% depending upon how desperate one is to sell. Not much inventory is moving so difficult to see the true hit to the mkt.

His concern was that over the next two years the majority of the mortgages will need to renew. Many of these current mortgages were signed when rates were 2-3% lower than today. Some of those rates were under 2% so they will face double the interest costs at renewal. That’s a big adjustment on the monthly payment.

Now the next hit is when the loan to value needs to be reduced and the home owner needs to bring capital to the table to pay down the mortgage. Many of the homeowners have equity in their homes and the value can drop a bit more without paying the mortgage down.
That’s the good news.

There is a sizable group that will still be trapped. The Bank of Mom and Dad has run out of available cash as they may have taken out a mortgage or donated cash to give their adult children some funds to buy these homes in the first place. So the Bank of Mom and Dad are stretched and may be unable to help out this time.

I am not sure if this event will occur as he mentioned, as the values would need to drop another 10-15% before the SHTF.
So the next 6 months should be interesting.

My take is we may get a wave of cost increases across the board by this Fall as the fallout from the closure works itself through the economy. Could push many young households over the edge just making ends meet. There is nothing left over to cover these increases.