This is the scariest chart I have seen on the stock market.

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by MarioIlic

It helps explain what is happening and also what might happen in the rest of 2022?!?! The annual cost of mortgage payments on the average house in the US was about 10,000 a mere 15 months ago (a little over 800$/month). It is now almost 24,000 (roughly 2k/month). That is an insane change in a short amount of time. The series on this chart plots across the last 40 years. This leads the S&P 500 by 9-12 months in most cycles. That’s the scary part. Most of the increase in “the cost of mortgaging the average house” occurred in the first four months of this year so this argues the real danger for equities will be in the fall and early 2023 (i.e. 9-12 months later). I am hoping this relationship breaks down but it didn’t in 2008, or in 2000, or in 1990 … I think you get my drift. Happy Sunday.

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