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Inflation is the Fed's job, and rent is part of that. That doesn't extend into managing the housing market, but managing interest rates is a big thumb on the sc

Inflation is the Fed's job, and rent is part of that. That doesn't extend into managing the housing market, but managing interest rates is a big thumb on the scale.

refurb 3y ago
True, but this article is complaining about the opposite - the housing market can't sustain today's prices because of high interest rates. What you're talking about is what the fed is already try to do - bring inflation down with high interest rates.
- gndk 3y ago
  Prices will go further up when interest rates go down. Interest rates haven't been raised enough to reign in inflation.
toomuchtodo 3y ago
It’s a useless thumb for attempting to solve housing inflation. Housing shortages of millions of units means that if you’re priced out of a mortgage, you’re forced to rent with no rent price controls, so instead of mortgage bond investors collecting your housing spend, it’s instead landlords. The only way to fix housing costs is to build baby build, as fast as you can, and the Fed has no power over fiscal policy (and policy in general) to strongly encourage such a build rate. This should be on the scale of the Manhattan Project or the Inflation Reduction Act. https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... https://www.npr.org/2024/01/25/1225957874/housing-unaffordable-for-record-half-all-u-s-renters-study-finds https://www.npr.org/2024/01/25/1225957874/housing-unaffordab... https://www.jchs.harvard.edu/americas-rental-housing-2024 https://www.jchs.harvard.edu/americas-rental-housing-2024 https://youtu.be/Jl7vrujr1J4 https://youtu.be/Jl7vrujr1J4
- irjustin 3y ago
  I'll agree there needs to be a massive supply boost in the form of entry level housing (only for 1st time owners, get rid of corp land grabs). That's what Singapore does quite well (I currently live here). The HDB system isn't a free market - new supply is only allowed for the first time home buyer, priced cheaply and you're not allowed to sell for 5 yrs. Covid had very big problems on supply but SG gov has kept it's promise in creating a lot of new housing in the past 2 yrs. It has a lot of levers to control a housing bubble for its citizens and thusly a big portion of inflation.
  - nojvek 3y ago
    I agree with this move. Tax those who hold single family homes for renting to others and the problems will fix itself. Housing is seen as an investment. If a big portion of rent starts going into taxes, then it doesn’t become a speculative instrument. Have apartment complexes managed by corps with central management. Don’t make single family homes and townhomes a tool of speculative investment. US economy would grow a lot faster if the money sitting on houses went into companies producing goods and services.
- joecot 3y ago
  Build baby build doesn't work when Black Rock and so many other private equity companies are content to buy as many houses as they can and then hold them to raise prices further or rent them out. 44% of all Single-Family Home Purchases were from Private Investors in 2023. A huge portion of the problem would be solved immediately by 1) a vacancy tax, 2) banning the purchase of single family homes by corporations.
  - toomuchtodo 3y ago
    I agree this is a component of the solution due to the speed at which capital can move.
  - refurb 3y ago
    Those investors are most individuals buying houses to rent. Blackrocks fund accounted for 0.01% of US housing stock.
    - r00fus 3y ago
      Disagree [1]. Blackrock owns Invitations Homes, which does indeed own a large portion of US housing stock. They buy in cash or with loans that are a lot less interest rate than you or I would pay. [1] https://slate.com/business/2021/06/blackrock-invitation-houses-investment-firms-real-estate.html https://slate.com/business/2021/06/blackrock-invitation-hous...
      - refurb 3y ago
        Your article actually admits they don't own that big a percentage of homes. Invitation Homes operates in 16 cities, with the biggest concentration in Atlanta, where it owns 12,556 houses. (Though that’s not much compared with the 80,000 homes sold in Atlanta each year
- toomuchtodo 3y ago
  > This should be on the scale of the Manhattan Project or the Inflation Reduction Act. https://www.politico.com/news/2024/03/21/aoc-sanders-unveil-green-new-deal-for-housing-00148263 https://www.politico.com/news/2024/03/21/aoc-sanders-unveil-... ("AOC, Sanders unveil ‘Green New Deal’ for housing") https://www.politico.com/f/?id=0000018e-5eee-d570-adaf-fefe1d300000 https://www.politico.com/f/?id=0000018e-5eee-d570-adaf-fefe1...

Inflation is the Fed's job, and rent is part of that. That doesn't extend into managing the housing market, but managing interest rates is a big thumb on the scale.

refurb 3y ago

True, but this article is complaining about the opposite - the housing market can't sustain today's prices because of high interest rates. What you're talking about is what the fed is already try to do - bring inflation down with high interest rates.

gndk 3y ago
Prices will go further up when interest rates go down. Interest rates haven't been raised enough to reign in inflation.

toomuchtodo 3y ago

It’s a useless thumb for attempting to solve housing inflation. Housing shortages of millions of units means that if you’re priced out of a mortgage, you’re forced to rent with no rent price controls, so instead of mortgage bond investors collecting your housing spend, it’s instead landlords. The only way to fix housing costs is to build baby build, as fast as you can, and the Fed has no power over fiscal policy (and policy in general) to strongly encourage such a build rate. This should be on the scale of the Manhattan Project or the Inflation Reduction Act. https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... https://www.npr.org/2024/01/25/1225957874/housing-unaffordable-for-record-half-all-u-s-renters-study-finds https://www.npr.org/2024/01/25/1225957874/housing-unaffordab... https://www.jchs.harvard.edu/americas-rental-housing-2024 https://www.jchs.harvard.edu/americas-rental-housing-2024 https://youtu.be/Jl7vrujr1J4 https://youtu.be/Jl7vrujr1J4

irjustin 3y ago
I'll agree there needs to be a massive supply boost in the form of entry level housing (only for 1st time owners, get rid of corp land grabs). That's what Singapore does quite well (I currently live here). The HDB system isn't a free market - new supply is only allowed for the first time home buyer, priced cheaply and you're not allowed to sell for 5 yrs. Covid had very big problems on supply but SG gov has kept it's promise in creating a lot of new housing in the past 2 yrs. It has a lot of levers to control a housing bubble for its citizens and thusly a big portion of inflation.
- nojvek 3y ago
  I agree with this move. Tax those who hold single family homes for renting to others and the problems will fix itself. Housing is seen as an investment. If a big portion of rent starts going into taxes, then it doesn’t become a speculative instrument. Have apartment complexes managed by corps with central management. Don’t make single family homes and townhomes a tool of speculative investment. US economy would grow a lot faster if the money sitting on houses went into companies producing goods and services.
joecot 3y ago
Build baby build doesn't work when Black Rock and so many other private equity companies are content to buy as many houses as they can and then hold them to raise prices further or rent them out. 44% of all Single-Family Home Purchases were from Private Investors in 2023. A huge portion of the problem would be solved immediately by 1) a vacancy tax, 2) banning the purchase of single family homes by corporations.
- toomuchtodo 3y ago
  I agree this is a component of the solution due to the speed at which capital can move.
- refurb 3y ago
  Those investors are most individuals buying houses to rent. Blackrocks fund accounted for 0.01% of US housing stock.
  - r00fus 3y ago
    Disagree [1]. Blackrock owns Invitations Homes, which does indeed own a large portion of US housing stock. They buy in cash or with loans that are a lot less interest rate than you or I would pay. [1] https://slate.com/business/2021/06/blackrock-invitation-houses-investment-firms-real-estate.html https://slate.com/business/2021/06/blackrock-invitation-hous...
    - refurb 3y ago
      Your article actually admits they don't own that big a percentage of homes. Invitation Homes operates in 16 cities, with the biggest concentration in Atlanta, where it owns 12,556 houses. (Though that’s not much compared with the 80,000 homes sold in Atlanta each year
toomuchtodo 3y ago
> This should be on the scale of the Manhattan Project or the Inflation Reduction Act. https://www.politico.com/news/2024/03/21/aoc-sanders-unveil-green-new-deal-for-housing-00148263 https://www.politico.com/news/2024/03/21/aoc-sanders-unveil-... ("AOC, Sanders unveil ‘Green New Deal’ for housing") https://www.politico.com/f/?id=0000018e-5eee-d570-adaf-fefe1d300000 https://www.politico.com/f/?id=0000018e-5eee-d570-adaf-fefe1...