4 ms·

The Fed went after inflation in all the wrong places. Would have been infinitely more effective to just ban corporations from owning single family homes.

paxys 3y ago
And the Fed can do that how?
- miguelazo 3y ago
  I'm not suggesting that the Fed could do that. But the Fed isn't the only entity with tools to fight inflation. In fact, it has some of the worst because they take so long to take effect, it's brute force, and it almost always overcompensates.
- fuzzfactor 3y ago
  Remember when interest rates were 20%?
bequanna 3y ago
They are trying to undo their mistake of their over participation in the mortgage markets. Mortgage rates were too low for too long because the Fed was buying them up. Home prices went way up because payments were low and supply was somewhat constrained. Now, the Fed has pulled the rug out and is no longer buying mortgages. People with low rates are sitting still and you'll only see people selling who have to. So, supply is heavily restricted keeping prices higher even with the higher rates. Only a large tick up in unemployment will create more forced selling and a maybe some downtrend in pricing. The alternative (but much less likely scenario) is Congress eliminating some of the very generous tax incentives that exist for owning residential real estate as an investment. I wouldn't hold my breath waiting for this one.
matchbok 3y ago
Corporate ownership of homes has been a reality for 100 years. It's a drop in the bucket.
- miguelazo 3y ago
  Not massive hedge funds like BlackRock owning a significant portion of the market. Not to mention even Sovereign Wealth Funds!
  - dukeyukey 3y ago
    BlackRock owns a tiny, _tiny_ minority of single-family homes, even with a generous intepretation of "own". Plus, taking homes out of the owner-occupier market and into the rental market ought to drive rents down and make it easier for households to save up for a housing deposit.
    - miguelazo 3y ago
      Doesn't matter how tiny you or the so-called experts think it is. They own enough to have a significant impact on prices, especially in the most overheated markets: >According to Merkley’s office, last year we saw the fastest increase in hedge fund home purchases in the last 16 years. As examples of the impact, Merkley said data shows large hedge fund investors bought 42.8 percent of homes for sale in the Atlanta metro area and 38.8 percent of homes in the Phoenix area in 2021. https://www.kiro7.com/news/trending/new-senate-bill-aims-stop-hedge-funds-squeezing-out-families-trying-buy-home/DTX66WI2LFG35LASZPCXVGKNRM/ https://www.kiro7.com/news/trending/new-senate-bill-aims-sto...
      - matchbok 3y ago
        That data is meaningless without context. Atlanta is also building way more homes than most areas.
        miguelazo 3y ago
        By all means, provide some context that proves that isn't a significant share of the market.

paxys 3y ago

And the Fed can do that how?

miguelazo 3y ago
I'm not suggesting that the Fed could do that. But the Fed isn't the only entity with tools to fight inflation. In fact, it has some of the worst because they take so long to take effect, it's brute force, and it almost always overcompensates.
fuzzfactor 3y ago
Remember when interest rates were 20%?

bequanna 3y ago

They are trying to undo their mistake of their over participation in the mortgage markets. Mortgage rates were too low for too long because the Fed was buying them up. Home prices went way up because payments were low and supply was somewhat constrained. Now, the Fed has pulled the rug out and is no longer buying mortgages. People with low rates are sitting still and you'll only see people selling who have to. So, supply is heavily restricted keeping prices higher even with the higher rates. Only a large tick up in unemployment will create more forced selling and a maybe some downtrend in pricing. The alternative (but much less likely scenario) is Congress eliminating some of the very generous tax incentives that exist for owning residential real estate as an investment. I wouldn't hold my breath waiting for this one.

matchbok 3y ago

Corporate ownership of homes has been a reality for 100 years. It's a drop in the bucket.

miguelazo 3y ago
Not massive hedge funds like BlackRock owning a significant portion of the market. Not to mention even Sovereign Wealth Funds!
- dukeyukey 3y ago
  BlackRock owns a tiny, _tiny_ minority of single-family homes, even with a generous intepretation of "own". Plus, taking homes out of the owner-occupier market and into the rental market ought to drive rents down and make it easier for households to save up for a housing deposit.
  - miguelazo 3y ago
    Doesn't matter how tiny you or the so-called experts think it is. They own enough to have a significant impact on prices, especially in the most overheated markets: >According to Merkley’s office, last year we saw the fastest increase in hedge fund home purchases in the last 16 years. As examples of the impact, Merkley said data shows large hedge fund investors bought 42.8 percent of homes for sale in the Atlanta metro area and 38.8 percent of homes in the Phoenix area in 2021. https://www.kiro7.com/news/trending/new-senate-bill-aims-stop-hedge-funds-squeezing-out-families-trying-buy-home/DTX66WI2LFG35LASZPCXVGKNRM/ https://www.kiro7.com/news/trending/new-senate-bill-aims-sto...
    - matchbok 3y ago
      That data is meaningless without context. Atlanta is also building way more homes than most areas.
      - miguelazo 3y ago
        By all means, provide some context that proves that isn't a significant share of the market.