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Yeah but that's an overall lowering of debt servicing as a percent of disposable income. The only part that hasn't dropped much is consumer debt. Plus while re

Yeah but that's an overall lowering of debt servicing as a percent of disposable income. The only part that hasn't dropped much is consumer debt. Plus while reverse amortization might be less common, ARMs generally are still very popular and you'll see a hike in overall debt service associated with rising interest rates. I don't know what's gonna happen with the housing market and I don't think it'll crash either but I think part of the reason is because private equity has bought a huge amount of housing - BlackRock bought what, 10-15% of the houses sold in 2020?

mikeyouse 5y ago
Consumer debt is also low; https://fred.stlouisfed.org/series/CDSP https://fred.stlouisfed.org/series/CDSP And metrics like credit card delinquencies are at historic lows: https://fred.stlouisfed.org/series/DRCCLACBS https://fred.stlouisfed.org/series/DRCCLACBS ARMs actually aren't very popular - fewer than 15% of new mortgages are ARM. > BlackRock bought what, 10-15% of the houses sold in 2020? People vastly overestimate how large players like Blackrock are. There are something like 80 million single-family homes in the US. Of these, Blackrock owns 80 thousand. If they bought every one of those homes in 2020 (they didn't) - it would represent more like 1% of homes sold that year. And of course there are millions of condos not figured into my denominator. They're huge, but way under 1% of purchases.
- alphabettsy 5y ago
  Naïve question, but what happens if something like 5-10% of those ARMs default and the traditional default rate increases too?
- ameister14 5y ago
  Of the 80 million single family homes in the US, how many are sold each year? For your math to work (80,000 as 1%) it would have to be 8,000,000 or 10% of the overall supply. I can actually answer for you - roughly 820,000 single family homes were sold in 2020. So if BlackRock bought 80,000 homes then, that'd be about 10%.
  - mikeyouse 5y ago
    You're conflating some figures -- 820k new homes were sold[1] -- along with roughly 5.6 million existing homes[2]. [1] - https://www.housingwire.com/articles/new-home-sales-historically-high-in-2020/ https://www.housingwire.com/articles/new-home-sales-historic... [2] - https://cdn.nar.realtor/sites/default/files/documents/ehs-01-2022-breakouts-of-single-family-condo-and-co-op-2022-02-18.pdf https://cdn.nar.realtor/sites/default/files/documents/ehs-01...
    - ameister14 5y ago
      ah, you're right, it was 5 million existing single family, I was pulling from the census and misread. My mistake.
- analyte123 5y ago
  Good point but it works against your overall argument - the investors who buy 10-20% of houses are far less sophisticated than Blackrock and far more likely to start panic selling when their Airbnb income can’t pay their bills.
boppo1 5y ago
> BlackRock bought what, 10-15% of the houses sold in 2020 Is this official somewhere? I've seen it in headlines and heard it in soundbytes but did they disclose it in their 10k or something?
- mikeyouse 5y ago
  It's been debunked over and over again, but it's an attractive sound bite with a clear bogeyman, so of course it "sticks". https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble https://www.vox.com/22524829/wall-street-housing-market-blac...
  - silisili 5y ago
    It's not debunked, you're playing with stats. The claim is that investors are buying nearly 20 percent of housing. Your refutal is that they only own 1%. Both can be, and are, true. "A record 18.2 percent of all home purchases were made by investors during the third quarter of 2021, according to a new report by Redfin. That was up from 16.1 percent during the second quarter of 2021 and up 11.2 percent from the third quarter of 2020." https://www.washingtonpost.com/business/2021/12/01/buyer-demand-reaches-record-high-investors-snap-up-homes/ https://www.washingtonpost.com/business/2021/12/01/buyer-dem...
    - mikeyouse 5y ago
      I mean sure? If you change the statement from: "Blackrock bought 10%+ of the homes in the US in 2020" To: "Various 'investors' (including personal trusts and other tax / estate shielding entities often used for people buying their primary residence) bought 10%+ of the homes if you restrict the data to 40 large cities" then it's mostly true? But that's a different thing than was claimed.. The Redfin data that WaPo is relying on accounts for 494k homes sold in Q3 2021, of which 90k were bought by their definition of investor. But they're missing another ~1 million homes that were sold in the US during that time period outside of the cities that clearly had the most investor interest...
      - 5y ago

mikeyouse 5y ago

Consumer debt is also low; https://fred.stlouisfed.org/series/CDSP https://fred.stlouisfed.org/series/CDSP And metrics like credit card delinquencies are at historic lows: https://fred.stlouisfed.org/series/DRCCLACBS https://fred.stlouisfed.org/series/DRCCLACBS ARMs actually aren't very popular - fewer than 15% of new mortgages are ARM. > BlackRock bought what, 10-15% of the houses sold in 2020? People vastly overestimate how large players like Blackrock are. There are something like 80 million single-family homes in the US. Of these, Blackrock owns 80 thousand. If they bought every one of those homes in 2020 (they didn't) - it would represent more like 1% of homes sold that year. And of course there are millions of condos not figured into my denominator. They're huge, but way under 1% of purchases.

alphabettsy 5y ago
Naïve question, but what happens if something like 5-10% of those ARMs default and the traditional default rate increases too?
ameister14 5y ago
Of the 80 million single family homes in the US, how many are sold each year? For your math to work (80,000 as 1%) it would have to be 8,000,000 or 10% of the overall supply. I can actually answer for you - roughly 820,000 single family homes were sold in 2020. So if BlackRock bought 80,000 homes then, that'd be about 10%.
- mikeyouse 5y ago
  You're conflating some figures -- 820k new homes were sold[1] -- along with roughly 5.6 million existing homes[2]. [1] - https://www.housingwire.com/articles/new-home-sales-historically-high-in-2020/ https://www.housingwire.com/articles/new-home-sales-historic... [2] - https://cdn.nar.realtor/sites/default/files/documents/ehs-01-2022-breakouts-of-single-family-condo-and-co-op-2022-02-18.pdf https://cdn.nar.realtor/sites/default/files/documents/ehs-01...
  - ameister14 5y ago
    ah, you're right, it was 5 million existing single family, I was pulling from the census and misread. My mistake.
analyte123 5y ago
Good point but it works against your overall argument - the investors who buy 10-20% of houses are far less sophisticated than Blackrock and far more likely to start panic selling when their Airbnb income can’t pay their bills.

boppo1 5y ago

> BlackRock bought what, 10-15% of the houses sold in 2020 Is this official somewhere? I've seen it in headlines and heard it in soundbytes but did they disclose it in their 10k or something?

mikeyouse 5y ago
It's been debunked over and over again, but it's an attractive sound bite with a clear bogeyman, so of course it "sticks". https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble https://www.vox.com/22524829/wall-street-housing-market-blac...
- silisili 5y ago
  It's not debunked, you're playing with stats. The claim is that investors are buying nearly 20 percent of housing. Your refutal is that they only own 1%. Both can be, and are, true. "A record 18.2 percent of all home purchases were made by investors during the third quarter of 2021, according to a new report by Redfin. That was up from 16.1 percent during the second quarter of 2021 and up 11.2 percent from the third quarter of 2020." https://www.washingtonpost.com/business/2021/12/01/buyer-demand-reaches-record-high-investors-snap-up-homes/ https://www.washingtonpost.com/business/2021/12/01/buyer-dem...
  - mikeyouse 5y ago
    I mean sure? If you change the statement from: "Blackrock bought 10%+ of the homes in the US in 2020" To: "Various 'investors' (including personal trusts and other tax / estate shielding entities often used for people buying their primary residence) bought 10%+ of the homes if you restrict the data to 40 large cities" then it's mostly true? But that's a different thing than was claimed.. The Redfin data that WaPo is relying on accounts for 494k homes sold in Q3 2021, of which 90k were bought by their definition of investor. But they're missing another ~1 million homes that were sold in the US during that time period outside of the cities that clearly had the most investor interest...
    - 5y ago