Zillow seeks to sell 7k homes for $2.8B after flipping halt

Even though the first go at it may have failed due to whatever reason (stated or otherwise), whoever signed off on this should be promoted.

This is the worst of both worlds. You pay the interest penalty of a 30 year, with the payment of a 15 year (well, slightly more). The interest difference between a 30 and 15 year mortgage is about 30% (2.x% v 3.x% APR).

I did a 15 year mortgage, then refinanced it every 12m or so ($250 each time), resetting the payments back to 180 months each time. That way, I get the interest savings of a 15 year, which is significant, and each refinance makes your payment quite a bit lower because a 15 year loan actually pays back principal. After six years, my mortgage will be the same as it would have been if I originally got a 30 year, but it will be paid off in 21 years instead of 30.

There's a risk interest rates rise, or I lose my job and can't refinance. But so far, so good. And honestly, my mortgage now is so close to what it would have been with an original 30 year loan that it doesn't even matter if I can never refinance. The hardest part was the first two years.

But keep in mind that in the 1970's, home prices were actually included in the CPI. If this were still the case today, we would actually see inflation levels similar to what we saw in the 70s.

The CPI formula has been changed many times over the years, to suppress inflation numbers. There are strong incentives to do this, as Social Security and many other things are tied to the CPI.

There are logical arguments for these changes though. Homes are financed goods, and consumption can be considered the monthly carrying cost and not the value of the asset. However, ignoring "asset inflation" has led to much worse wealth inequality IMO. It would be better to continue to include national average home prices. Nowadays, there's a measure called Owners Equivalent Rents that partially gauge this. But there are tons of methodological flaws in how rent equivalent data is collected for CPI that lead to both underreporting, and a lag of ~12 months. e.g. Rents are up about 20% nationally since the pandemic started, but CPI has shown roughly 3.5% so far. The next few months should start to show the full extent of rental increases.

Now that car prices are causing a large increase in CPI, don't be surprised when they alter the measurement of these factors next year. They'll use some measure like average monthly car payment.

Also keep in mind that unemployment was around 10% post GFC, and took about 10 years to get close to full employment. That was quite a large shock that took a long while to recover from.

The market did fall something like 20% in 2018 as the Fed raised rates to preempt inflation, but they chickened out and reversed course and market immediately rallied back all gains.

And as you said, it's pretty clear right now they are dragging their feet on doing anything post COVID. I'm pretty sure Powell is really optimizing for retaining his job, since his term ends very soon... otherwise they really shouldn't care about market movements to such an extent.

They will almost certainly announce the taper tomorrow, but expect it to be wrapped in all kinds of dovish language to juice assets/speculation further.

Regardless of short term interest rate peg, they should absolutely not be buying bonds to suppress long term rates. They have been continuing an "emergency" bond buying program for a full year beyond what was reasonable to most people. I mean, why are they buying 120B worth of bonds every month, as housing prices have gone up something like 30% nationally? They are terminally afraid that if they can't manipulate long term rates lower through QE, that rates will rise and market or housing will tank. Well, we'll find out soon enough

Opendoor still holds it, Zillow is already marking down a similar one by 14%.