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Looking at the graphs of US home prices to buyer income, it would seem something has to give (the value of homes or the value of the dollar). With how leveraged
by mrinterweb 1y ago
Looking at the graphs of US home prices to buyer income, it would seem something has to give (the value of homes or the value of the dollar). With how leveraged Fannie and Freddie are, the value of their assets would fall considerably if there is a significant disruption in the real estate market.
- onlyrealcuzzo 1y agoThe government insures against home price decreases. It has zero interest in homes going down in value (not only from a voting perspective, but also from a financial perspective). The thing that's going to give (long term) is not going to be nominal home prices. Real home prices declines are plausible.
- mrinterweb 1y agoAnyone who's invested in real estate doesn't want home prices to go down, but it seems a necessity considering how affordability has been decreasing. I would think a buyer market can only sustain so much. If a recession is caused by tariffs, AI taking jobs, war, etc; the real estate market seems to be in a precarious enough position to be affected.
- jaxtracks 1y agoWell, inflation can always solve affordability if prices stagnate. This is what made the 90s a great time to buy, right? We're pretty far behind the ball though, I think it'd be like 20 years for us to get back to that level of affordability at current nominal interest rates.
- onlyrealcuzzo 1y ago> the real estate market seems to be in a precarious enough position to be affected. In real terms, yes. In nominal terms, no. The dollar will get tanked, so that asset prices fall much less than they otherwise would.