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Houses shouldn’t be investment. Anything could be investment. We had many bubbles in the past like tulip. It’s just tulip are not essential to live. You can ima
by pzo 3y ago
Houses shouldn’t be investment. Anything could be investment. We had many bubbles in the past like tulip. It’s just tulip are not essential to live. You can imagine having idea to make cars also an investment and buying all available cars as investment. Normally market will try to make up the demand and build more cars but with houses it’s more complicated because you wanna live where is infrastructure - and that takes decades to build.
From recent examples when Covid started everyone was “investing” in hand sanitizers, masks, gloves - it was crazy expensive and so short in supplies that even pharmacies couldn’t get it from wholesellers - scalpers instead where making a killing .
But you cannot just ramp up house production that fast.
- maxerickson 3y agoYou can't really prevent something from being an investment. Which isn't to say I disagree with you, policy should favor direct housing affordability over things like price appreciation and subsidizing ownership. I wonder if there's a sensible way to limit how much leverage Fanny and Freddie will back, maybe by shortening the maximum allowed term of mortgages as interest rates fall below some specified point. Not sure you can do that in a way that avoids a cliff though.