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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

#171

Post by jcfrei »

wonder_er wrote: post #86
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.

> Also, I don't understand how millennials aren't supposed to see this figure and immediately feel a sense of rejection Millenial here. 100% agreed with this. Feels like a big blind spot in the boomer crowd. They don't seem to see the seething, roiling, overpowering resentment their entire generation is receiving from many, many people that currently don't have much power in society . A politician wants to win office…

What are you implying with "these policy positions are at odds with power brokers in the USA"? The politician you describe would most likely not win the popular vote because the most important voting base for most politicians is the 50+ crowd (in the US and most other Western countries) and this demographic wouldn't care too much about these issues. It's really a generational conflict.

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

#172

Post by CydeWeys »

missedthecue wrote: post #80
alisonkisk wrote: post #73

Earlier quoted context omitted.

Sacrificing 10% of your life to air travel, plus massive fuel waste, doesn't sound nice

Point is, you can't expect to have your cake and eat it too

Eating your cake and having it too is literally impossible, but having affordable housing absolutely isn't impossible. We just need to go back to the more permissive housing construction days of yore when we actually built enough housing supply to satisfy rising demand. That's why housing was so affordable until just the past few decades. We could have that situation again; it's not literally impossible.

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

#173

Post by tialaramex »

gbasin wrote: post #146
tialaramex wrote: post #126

Earlier quoted context omitted.

> Wait, what? Wouldn't it mean that a pool of prospective buyers that couldn't afford 20% but can afford 5% are now able to buy a house? No. Real property doesn't work that way at all. The effect of most of this kind of government intervention in the housing market is to subsidise developers. In fact it's so bad that in the UK shareholders of such a developer are outraged because the uncapped bonus structure for exec…

Developers can't get FHA loans

That's correct. Developers sell homes. The FHA loan uses government money to allow people who buy homes to pay more money for the same home, this money goes to the developers.

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

#174

Post by horsemessiah »

qeternity wrote: post #153
b34r wrote: post #137

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because government.) Real estate seems like a pretty important part of the economy and, more importantly, the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually…

> Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? > Real estate seems like a pretty important part of the economy... You just answered your own question. Governments do not have a history of distributing scarce resources effectively. You need various market forces. > the government artificially making housing more accessible for potential first time buyers creates a vir…

Markets are basically anarchy... there are countless examples of markets inefficiently allocating resources (homes, for one). Not sure I buy this.

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

#175

Post by NationalPark »

tenpies wrote: post #154
b34r wrote: post #137

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because government.) Real estate seems like a pretty important part of the economy and, more importantly, the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually…

Because the government is a terrible market participant. It has infinite money, they suffer no consequences, and ideologues come up every so often and let their agendas take over any economic objective the program had in mind. This is happening now more than ever with the Democrats seemingly deciding that the US Fed has the additional mandate of fighting systemic racism.

The Fed board is appointed by the President and approved by the Senate. The current chairman was appointed by Trump. The article doesn't even mention racism so I guess this is probably a throwaway culture war post but I have a hard time seeing how this of all things could be pinned on the Democrats. If anything it's the anti-public-health Republicans who let the pandemic get out of control and lead to a Fed buying spree.

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

#176

Post by jcfrei »

Red_Leaves_Flyy wrote: post #110
alisonkisk wrote: post #76

Earlier quoted context omitted.

Healthcare, education, housing prices go somewhere though.

Just about every thing limited by domestic labor has been inflating for decades.

Globalization is certainly a very important factor but technology also has to be mentioned. In lots of industries it has massively reduced the bargaining power of the working people. Mostly because increasing output is much less dependent on labour than in the past.

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

#177

Post by mgh2 »

This is actually a good trend. Just compare this to the alternative. San Francisco and Seattle, where the tech elite overprice the non-tech population, decimating local communities and worsening the homeless problem. Vancouver and Irvine, where Chinese elite launder money to buy real state as investments (and leave them empty) rather than living spaces, resulting in the same problem.

This all might be a silver lining of the pandemic: combined with remote work, people are no longer confined to one place - avoiding discrimination of all sorts (from real state to immigration). The truth is that if the rich are left unchecked, greed can run rampant and create more harm than good- ex: healthcare, stock bubbles.

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

#178

Post by snarf21 »

lvs wrote: post #13

There would be no inherent problem with having the Fed hold this much debt, if the tax system then soaked up distortions in how the resulting stimulus was distributed into the economy. That is, if the tax system is structured to pull back currency from unproductive sinks before it yields inflation, then there's no problem with the Fed holding that debt. A better structure, as others have pointed out, would be to have…

You're so right. It is clear that monetary policy isn't enough. We need Congress to step in with a real plan for fiscal policy adjustments. The Fed can just do whatever they want so they do. Congress fights to get anything moving. The issue is that this asset bubble continues to grow and near zero interest rates isn't doing anything but inflating asset prices. We need fiscal policy to start growing the GDP and we need it yesterday.

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

#179

Post by black_puppydog »

qeternity wrote: post #153
b34r wrote: post #137

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because government.) Real estate seems like a pretty important part of the economy and, more importantly, the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually…

> Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? > Real estate seems like a pretty important part of the economy... You just answered your own question. Governments do not have a history of distributing scarce resources effectively. You need various market forces. > the government artificially making housing more accessible for potential first time buyers creates a vir…

> Governments do not have a history of distributing scarce resources effectively.

To be fair, "various market forces" also don't have the best track record of distributing resources, especially scarce ones. Somehow those always end up being "distributed" into the same few hands...

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

#180

Post by [deleted] »

mgh2 wrote: post #177

This is actually a good trend. Just compare this to the alternative. San Francisco and Seattle, where the tech elite overprice the non-tech population, decimating local communities and worsening the homeless problem. Vancouver and Irvine, where Chinese elite launder money to buy real state as investments (and leave them empty) rather than living spaces, resulting in the same problem. This all might be a silver lining…

[deleted]
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