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The Fed now owns nearly 1/3 of all U.S. mortgages

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Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#41

Post by refurb »

scrumbledober wrote: post #34
JMTQp8lwXL wrote: post #18

I would be curious to see analysis for what home prices would be with 0 Fed intervention. Also, I don't understand how millennials aren't supposed to see this figure and immediately feel a sense of rejection, that the housing market is some form of a pyramid scheme, where you had to get in early to have a chance.

well as a 30 year old looking for my first home who grew up in the bay area... yeah that's exactly what I feel.

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily.

That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on.

To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home).

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#42

Post by chishaku »

JMTQp8lwXL wrote: post #18

I would be curious to see analysis for what home prices would be with 0 Fed intervention. Also, I don't understand how millennials aren't supposed to see this figure and immediately feel a sense of rejection, that the housing market is some form of a pyramid scheme, where you had to get in early to have a chance.

> I would be curious to see analysis for what home prices would be with 0 Fed intervention.

Just imagine a graph where asset prices don't only go up.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#43

Post by legulere »

refurb wrote: post #41
scrumbledober wrote: post #34

Earlier quoted context omitted.

well as a 30 year old looking for my first home who grew up in the bay area... yeah that's exactly what I feel.

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home)…

Moving often means leaving friends and family behind.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#44

Post by refurb »

remote_phone wrote: post #8
hn_throwaway_99 wrote: post #7

I keep thinking of all the huge amount of asset purchases by the Fed, especially legally dubious purchases like corporate bonds, that "this won't end well". That said, I don't really know what "not ending well" would look like. Would it just be total runaway inflation? Can anyone more knowledgeable comment on what possible endgames are for these asset purchases?

The worst case scenario is the rest of the world dumping US treasuries, and causing interest rates to skyrocket and USD to plummet.

Countries are buying US gov't debt because: 1) they have a lot of USD due to exporting goods to the US and 2) it's one of the safest places you can park money.

Sure, it would be bad if they dumped treasuries (at a big loss), but why would they do that if they put the money there in the first place because it was safe?

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#45

Post by epicureanideal »

refurb wrote: post #41
scrumbledober wrote: post #34

Earlier quoted context omitted.

well as a 30 year old looking for my first home who grew up in the bay area... yeah that's exactly what I feel.

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home)…

The problem is that at the same time, the good jobs are being concentrated in a small number of cities.

Even if someone is willing to move to a cheaper place, they find that relative to the employment available, it isn't much better.

In the end, they realize that no matter what they choose, they need to struggle incredibly hard just to get a similar quality of life to what a baby boomer was able to achieve with a high school diploma and a manual labor job.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#46

Post by septillianator »

jdm2212 wrote: post #32
donmcronald wrote: post #26

Earlier quoted context omitted.

If you print money, but only give it to the top 10% who use it to prop up the stock market, does that cause inflation? I don't understand how America can pump a couple trillion dollars into the economy and it doesn't seem to have any impact. If the average person is getting any of that it should cause inflation, shouldn't it?

There's no impact because people are sitting on cash rather than spending it. What the Fed accomplishes by handing out the $1 trillion is this: they kept all the _other_ money circulating. If people wanted to hoard $1 trillion because they're scared about the future, well, now they've hoarded it. They feel safe and they spend the rest of their money, and the economy keeps humming along. If instead they'd tried to hoa…

People or Corps? Seems like stimulus money is eventually just finds its way to a handful of companies that are making piles with it.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#47

Post by refurb »

the-dude wrote: post #40
remote_phone wrote: post #5

I just refinanced my 30-year fixed mortgage for 2.5%. The rate is utterly ridiculous now. If we get even a modicum of inflation over the next few years, I will be paying negative real interest rates.

I was paying 0.6% for the last years ( Euribor mortage ). Some people in North West Europe actually had negative rates already.

What was the term? Was it a floating rate after a lock-in period?

The thing that makes 2.5% so incredible in the US, is that it's the rate for a 30 year fixed mortgage. Get one of those loan today and you'd still be paying 2.5% interest in 2049.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#48

Post by refurb »

legulere wrote: post #43
refurb wrote: post #41

Earlier quoted context omitted.

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home)…

Moving often means leaving friends and family behind.

There are drawbacks. But find a lower cost of living city and the savings on housing means you could probably fly back home once a month and still be ahead.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#49

Post by dternyak »

adventured wrote: post #33
dternyak wrote: post #24

Earlier quoted context omitted.

> The rest of the world buys US treasuries cause we buy their goods. China buys treasuries because we buy goods with dollars. China has to do something with the dollars. It strikes me as extremely odd that it's become so normalized that the U.S.'s role in trade is simply as a buyer of goods. In any transaction, both parties are typically better off after having made the transaction, else one party would refuse. The U…

> It strikes me as extremely odd that it's become so normalized that the U.S.'s role in trade is simply as a buyer of goods. It should strike you as odd, what you're saying is wrong. The US exports $2.5 trillion worth of goods and services, including $1.7 trillion of goods. The US is the world's #2 exporter of goods. With services included, the US is nearly the world's #1 exporter. In 2018, the US was behind China by…

Of course, I'm familiar that the U.S. exports goods as well. Certainly the relationship specifically with China is one of a large and continuous trade deficit.

However, the broad intention of my previous comment is to illustrate that the narrative being that the U.S. is simply one of purchaser is lacking, or else if that narrative is correct, it will not be true for much longer once the trading partners catch on.

Re: The Fed now owns nearly 1/3 of all U.S. mortgages

#50

Post by MattGaiser »

epicureanideal wrote: post #45
refurb wrote: post #41

Earlier quoted context omitted.

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home)…

The problem is that at the same time, the good jobs are being concentrated in a small number of cities. Even if someone is willing to move to a cheaper place, they find that relative to the employment available, it isn't much better. In the end, they realize that no matter what they choose, they need to struggle incredibly hard just to get a similar quality of life to what a baby boomer was able to achieve with a hig…

The good jobs are concentrated in a small number of cities. But the number of cities is far larger than SFO and NYC.
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