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ya know how practically unlimited student loans made it so colleges could charge much higher prices? the same thing is happening with home prices. government, t

by kart23 4y ago

ya know how practically unlimited student loans made it so colleges could charge much higher prices? the same thing is happening with home prices. government, through the treasuries massive holdings of mortgage-backed securities, is subsidizing the real estate market, keeping homes unaffordable for recent generations. the fed purchased more MBS during covid for ‘price support’. literally keeping home prices high instead of letting them naturally fall. our housing market is going to be fucked until the fed decides to actually start selling off the MBS. and senators try to tell you that your rent is actually high because of ‘greedy landlords’. https://www.bloomberg.com/news/articles/2022-09-22/mortgage-investors-jump-in-after-fed-says-mbs-sales-aren-t-near https://www.bloomberg.com/news/articles/2022-09-22/mortgage-... https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB https://www.richmondfed.org/publications/research/economic_brief/2020/eb_20-08 https://www.richmondfed.org/publications/research/economic_b... > Over a longer term, increased mortgage credit supply may push up house price inflation and make housing less affordable.

pr337h4m 4y ago
While zoning laws ensure that no high-density housing can ever be built ¯\_(ツ)_/¯
JumpCrisscross 4y ago
> our housing market is going to be fucked until the fed decides to actually start selling off the MBS Agency MBS are being run off at about $20bn per month [1], with the Fed signaling it's due to increase that rate. While that's 11 years against their $2.7tn of holdings, they're currently in a neutral position. They aren't influencing the housing market. (Selling would influence it by jacking up rates.) [1] https://www.americanbanker.com/news/powell-fed-will-sell-mortgage-backed-securities-just-not-yet https://www.americanbanker.com/news/powell-fed-will-sell-mor...
- kart23 4y ago
  sure, and we see the effect of that because house prices are slowly going down now, yet just like mbs holdings, not nearly fast enough to put a meaningful dent in the covid gains. and yes, rates will go up, but a return to the free market is what we need long-term, instead of prices being artificially propped up by the government. https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA
  - pas 4y ago
    there's not going to be a radically free-er market in housing. zoning regulations and the whole path dependence of the last centuries restrict choices to very few ones. as long as the network effect of cities, the macro effects of the global economy (the dollar propped up, suppressing exports, which wreaks havoc on everything that's not finance) and various other factors (school districts, car dependence) have so oversized influence on where people can live. and for the foreseeable future there are going to be very high-level coordination problems which keep the market in a pathological state.

by kart23 4y ago

pr337h4m 4y ago

While zoning laws ensure that no high-density housing can ever be built ¯\_(ツ)_/¯

JumpCrisscross 4y ago

> our housing market is going to be fucked until the fed decides to actually start selling off the MBS Agency MBS are being run off at about $20bn per month [1], with the Fed signaling it's due to increase that rate. While that's 11 years against their $2.7tn of holdings, they're currently in a neutral position. They aren't influencing the housing market. (Selling would influence it by jacking up rates.) [1] https://www.americanbanker.com/news/powell-fed-will-sell-mortgage-backed-securities-just-not-yet https://www.americanbanker.com/news/powell-fed-will-sell-mor...

kart23 4y ago
sure, and we see the effect of that because house prices are slowly going down now, yet just like mbs holdings, not nearly fast enough to put a meaningful dent in the covid gains. and yes, rates will go up, but a return to the free market is what we need long-term, instead of prices being artificially propped up by the government. https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA
- pas 4y ago
  there's not going to be a radically free-er market in housing. zoning regulations and the whole path dependence of the last centuries restrict choices to very few ones. as long as the network effect of cities, the macro effects of the global economy (the dollar propped up, suppressing exports, which wreaks havoc on everything that's not finance) and various other factors (school districts, car dependence) have so oversized influence on where people can live. and for the foreseeable future there are going to be very high-level coordination problems which keep the market in a pathological state.