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Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

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Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#61

Post by bradleyjg »

skywal_l wrote: post #58
bradleyjg wrote: post #53

Earlier quoted context omitted.

Hogs get slaughtered. We’ve collectively figured out that we have the world’s only gold mine and are busy exploiting the F out of it. Both parties, round the clock. For example, we prop up our residential housing market by having one part of the government create dollars to buy the mortgages backed securities created by another part of the government in order to keep the yields down and justify low mortgage interest…

> Do you think the rest of the world is going to sit back and be cynically exploited forever? Yes absolutely. Because this system does not benefits american citizens (it used to, but it is less and less the case). It benefits world elites which have been co-opted in a global financial system which is based on the dollar. Hell, the CCP leaders all own assets in dollars, they wouldn't want to see any of this change. Re…

It absolutely does benefit US citizens. The argument to the contrary about boogeyman elites is just designed to let ordinary Americans off the hook so they will join in your crusade (and so they won’t have to feel guilty.)

Ordinary American homeowners have massively benefited from rising home prices. They’ve spent that money on vacations, cars, drugs, etc.

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#62

Post by defaultprimate »

chernevik wrote: post #55

"Under the terms of their 2008 conservatorships, [Fannie and Freddie] currently have access to more than $250 billion in support from the Treasury Department." These institutions and their Federal guarantees contributed enormously to the 2008 housing bubble and subsequent collapse. But 13 years later, here they are, allocating credit. What could go wrong?

It's gonna be glorious

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#63

Post by opportune »

bradleyjg wrote: post #5

So much for the US being considered right wing. US residential mortgages represent one of the largest examples of socialism in action anywhere with nary a complaint from either US party.

Socialism is when people take out loans to purchase private property

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#64

Post by kipchak »

skywal_l wrote: post #38
bradleyjg wrote: post #11

Earlier quoted context omitted.

The market will not be allowed to correct. That was the lesson of 2008. The only endgame here comes after the end of dollar dominance.

Now in what circumstances the dominance of the dollar would end? The dollar has pretty much replaced gold in the world economy. And the US happens to own the only mine in the world. I don't see any scenario, bear some sort of cataclysmic event, that would, in say, the next 50 years, change any of that. But I would gladly have my mind changed.

I could see alternative currencies becoming and increasingly available option. Something like SDRs used by the IMF could emerge for example, made up of multiple international currencies. Not necessarily a replacement, but a decreasing reliance.

Russia, the EU and China are fairly aggressively de-dollarizing, and encouraging trading partners to do the same.[1][2] See CMIM for example in the Asia region, INSTEX in the EU to get around Iran sanctions and the creation of the "Petroyuan". Lyn Alden has a great overview.[4]

[1]https://www.everycrsreport.com/files/2021-07-23_IF11885_09a6...

[2]https://www.csis.org/blogs/new-perspectives-asia/chiang-mai-...

[3]https://infobrics.org/post/32689/

[4]https://www.lynalden.com/fraying-petrodollar-system/#fraying

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#65

Post by Arrath »

defaultprimate wrote: post #62
chernevik wrote: post #55

"Under the terms of their 2008 conservatorships, [Fannie and Freddie] currently have access to more than $250 billion in support from the Treasury Department." These institutions and their Federal guarantees contributed enormously to the 2008 housing bubble and subsequent collapse. But 13 years later, here they are, allocating credit. What could go wrong?

It's gonna be glorious

Get it while you can!

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#66

Post by [deleted] »

kipchak wrote: post #64
skywal_l wrote: post #38

Earlier quoted context omitted.

Now in what circumstances the dominance of the dollar would end? The dollar has pretty much replaced gold in the world economy. And the US happens to own the only mine in the world. I don't see any scenario, bear some sort of cataclysmic event, that would, in say, the next 50 years, change any of that. But I would gladly have my mind changed.

I could see alternative currencies becoming and increasingly available option. Something like SDRs used by the IMF could emerge for example, made up of multiple international currencies. Not necessarily a replacement, but a decreasing reliance. Russia, the EU and China are fairly aggressively de-dollarizing, and encouraging trading partners to do the same.[1][2] See CMIM for example in the Asia region, INSTEX in the…

[deleted]

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#67

Post by jjoonathan »

ab_testing wrote: post #43
jjoonathan wrote: post #16

Earlier quoted context omitted.

Right, new owners who just bet N times their yearly salary that the music won't stop in the next 15-30 years. The demographic pyramid is inverting, interest rates have been falling but are now hitting 0, and the asset-owning bloc is falling below 50% of the electorate. Any one of these could stop the music, but all three are happening.

None of this matters if the supply of available homes is less than the population when accounted for growth. Combined that in NIMBYism in every city and renewed interest from international investors, and we have a receipe where home prices can go up far above the yearly income of the average household.

> asset-owning bloc is falling below 50% of the electorate

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#68

Post by rich_sasha »

chernevik wrote: post #55

"Under the terms of their 2008 conservatorships, [Fannie and Freddie] currently have access to more than $250 billion in support from the Treasury Department." These institutions and their Federal guarantees contributed enormously to the 2008 housing bubble and subsequent collapse. But 13 years later, here they are, allocating credit. What could go wrong?

IIRC, these two did exactly what they are supposed to. They always had implied backing of the government, meaning basically this.

The issue was actually mortgages not backed by either of these, which however were still securitised and traded as if they were. When housing market slowed, evictions and defaults mounted, investors in FDIC et al were fine, the mortgages were backed.

It was all the other ones that went to 0 and caused the all-planet financial meltdown.

So if anything it’s good to see that the credit expansion is going through these entities.

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#69

Post by linksnapzz »

runako wrote: post #52
nicoburns wrote: post #37

Earlier quoted context omitted.

I'm rather anticipating (1) collapsing in the next couple of years. It's possible governments will try to put it off, but it's going to have to happen at some point.

People keep saying this, and perhaps they will be proven correct at some point. But it brings to mind the economics maxim that "in the long run, we're all dead." Japan's interest rate has not exceeded 0.5% for the last 25 years: https://tradingeconomics.com/japan/interest-rate Ours hasn't been in a "normal" range for almost 15 years. At what point are low interest rates just the backdrop of our time here rather than…

Another economics maxim:

"Things that obviously can't go on forever; will go on for far longer than you would believe...but when they stop, they also stop faster than you'd think."

Also:

"The market can remain irrational far longer than you can remain solvent".

Re: Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M as Prices Soar

#70

Post by yardie »

WORMS_EAT_WORMS wrote: post #15
yardie wrote: post #4

$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.

I could not downvote this faster. Ridiculous and wrong. Shameful advice. I be curious know your age, income, and net worth to see how out of touch you are. Do not take this advice and debt at this ratio. - take home is gross income not net like taxes or health insurance. It also doesn’t factor in retirement even - mortgage estimate is wrong - does not factor property taxes - Just open an affordability calculator or m…

I made no insinuation that you should buy everyone has to decide for themself. Now, based on current lending standards a $1mm home is not as far off as much as you would like to believe and it doesn't take a CEO salary to "afford" it, either.

But you can continue to wait and see if prices come down, which will happen when supply goes up, which will happen when the supply chain returns to normal, which will happen when manufacturing returns to normal.

The point being is there are a lot externalities driving home prices right now, and whether buyers can comfortably afford it isn't one of them.

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