The United States housing market enjoyed an uptick in the mid-to-late 2000s that was built on very shaky ground. Highly questionable underwriting and even more dubious borrowing standards in years before the 2007-2008 financial crisis led to one of the most devastating economic downturns in the modern era. Moreover, many Americans felt the pain of the subsequent housing correction as their home values were chipped away at by a tidal wave of defaults and foreclosures.
Fast forward to 2023, and the US housing market has enjoyed a steady rebound over the past 15 years. Old and trusted housing markets, like those in New York, bounced back over time. Meanwhile, housing markets like those in Florida have grown into some of the most desired real estate in the country. That said, these markets have climbed to these levels on the back of historically low interest rates and friendly borrowing standards.
The United States Federal Reserve charted its most aggressive interest rate tightening policy since the early 2000s, starting in the spring of 2022. The benchmark rate went from its lowest levels over a 25-year span, at 0.25%, to its highest level over the past quarter century, at 5.5% at the time of this writing. This has put the squeeze on a citizenry that was already overleveraged entering this new decade. Now, borrowers will need to adjust to the current climate and likely make significant lifestyle changes.
Lendingtree (NASDAQ:TREE) is a stock to watch as U.S. citizens are faced with this daunting test. This Charlotte-based company operates an online consumer platform in the United States. In the second quarter (Q2) of fiscal 2023, Lendingtree delivered adjusted EBITDA of $26.7 million and adjusted net income of $1.14 per share.