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

thestreet.com

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

#201

Post by jokethrowaway »

gwd wrote: post #156
refurb wrote: post #54

Earlier quoted context omitted.

I would be curious to see analysis for what home prices would be with 0 Fed intervention. It is an interesting thought experiment. From what I've gathered, any intervention by the government to make housing more accessible, just gets priced in pretty quickly, removing the benefit. For example, FHA offering 5% down payments instead of a standard 20%, just means every first time buyer can now pay 15% more (approximatel…

> From what I've gathered, any intervention by the government to make housing more accessible, just gets priced in pretty quickly, removing the benefit. You say "any intervention", but you've only mentioned interventions that give more money. Other interventions: 1. Encouraging developers to build new properties, particularly properties for low- and medium-income tenants 2. The government building low- to medium-inco…

It's been tried in the UK (south east), nothing positive come out of it. The best thing they can do is get out of the way

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

#202

Post by smooth_remmy »

lkrubner wrote: post #102
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.

Prices would be very low and unemployment would have averaged 50% for the last 12 years. I’m half joking, but if the Fed did nothing then we would still be in the middle of the Great Recession. Or consider the British “Great Depression” of the late 1800s — that lasted 20 years because the pound was over-valued.

Both Democrats and Republicans acknowledge that the Great Recession was caused by government housing policy. So presumably - if we had a small government with no Fed - we would also have no Fannie Mae and the Great Recession would have never happened.

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

#203

Post by pnutjam »

sokoloff wrote: post #128
paulgb wrote: post #99

Earlier quoted context omitted.

I'm surprised #1 isn't proposed more. It's not really even that radical when you consider that the Overton window now includes completely eliminating student debt.

If you want to offer student loans to people with low incomes (as almost all students are and many of their families also are), you’re not going to be able to offer loans with traditional finance-based underwriting standards. If someone can only qualify for a pre-paid credit card or payday loan, is a lender going to step up and offer $100K+ in education loans? I don’t want higher education open primarily to the alrea…

See my post above, that's already the case. I was able to setup a payment plan for the last part of my daughters tuition, about $100 /month. She had a scholarship for 100% of tuition and still couldn't get enough federal loans to cover room and board for the year at Purdue.

Luckily she also had some money saved for books, but there are plenty of families that couldn't afford this.

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

#204

Post by runbsd »

rayhendricks wrote: post #168
wyclif wrote: post #142

Earlier quoted context omitted.

Since you're spent a lot of time researching this: have you ever found a way to correlate 3rd-tier and below cities with fiber internet speeds and infrastructure? Seems like that info would be useful to a lot of people here, who are looking to move to a more rural area but are working tech jobs remote long term or even permanently and need fast internet.

This is a great idea. I’d take it a step further and correlate it to the availability of municipal fiber and also a Costco within a 30min drive.

I live in a small town, about 20min away from the larger city, with FTTH and reasonable cost of living. There are disadvantages to living in the country (you have to drive everywhere), but it's just a balance.I definitely enjoy zero crime, no traffic, fresh air and a large lot so I am not crammed with my neighbors. The downside is that I can't walk everywhere, but that is fine.

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

#205

Post by cf »

pharke wrote: post #186
gwd wrote: post #156

Earlier quoted context omitted.

> From what I've gathered, any intervention by the government to make housing more accessible, just gets priced in pretty quickly, removing the benefit. You say "any intervention", but you've only mentioned interventions that give more money. Other interventions: 1. Encouraging developers to build new properties, particularly properties for low- and medium-income tenants 2. The government building low- to medium-inco…

I would look to England for answers to those questions.

No conversation about England and housing is complete without discussing Right to Buy where affordable public housing is privatised and then has its value rapidly rise to meet market prices.

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

#206

Post by tnel77 »

tfigment wrote: post #164
gwd wrote: post #156

Earlier quoted context omitted.

> From what I've gathered, any intervention by the government to make housing more accessible, just gets priced in pretty quickly, removing the benefit. You say "any intervention", but you've only mentioned interventions that give more money. Other interventions: 1. Encouraging developers to build new properties, particularly properties for low- and medium-income tenants 2. The government building low- to medium-inco…

And they get unhappy because they have been trained to think of housing as investment that should grow faster than inflation rather than a place to live.

You don’t treat a couple hundred thousand dollars as an investment? Sounds privileged.

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

#209

Post by rustyboy »

brmgb wrote: post #152
lkrubner wrote: post #102

Earlier quoted context omitted.

Prices would be very low and unemployment would have averaged 50% for the last 12 years. I’m half joking, but if the Fed did nothing then we would still be in the middle of the Great Recession. Or consider the British “Great Depression” of the late 1800s — that lasted 20 years because the pound was over-valued.

The interesting question is what would have happened if the USA had directely nationalized and restructured the failing banks rather than loan them money after the subprime mortgage crisis and if it had supported the economy through productive investments in infrastructure rather than lowering the Federal funds rate.

Completely agree, and bought out all underwater mortages?! See HAMP program failure

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

#210

Post by germinalphrase »

true_religion wrote: post #68
septillianator wrote: post #46

Earlier quoted context omitted.

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

People run corporations. When you see a round of layoffs it doesn't come out of mere cold blooded economic necessity. The leadership gets scared, and no longer feels optimistic thus they cut projects. Sure, you can give all the money directly to the common people, but you'd end up having to do that forever since the wider economy would collapse as rich share holders first feel doubt, then have those doubts confirmed…

“ Common people should have non emergency sources of welfare, and governmental aid to rely on. If they don't, then the situation is aleady dire.”

The pandemic is showing that most people and state governments are willfully unprepared to provide such welfare even in an emergency.

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