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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

#311

Post by sizzle »

gwd wrote: post #278
daed wrote: post #244

Earlier quoted context omitted.

What if the cost of the monthly interest on your mortgage for that $500k house was less than your rent?

If it's an interest-only mortgage, and you are sure the value isn't going to go down, then fine. But if you're putting in capital, you have to factor in the cost of money. There are far better things to do with $500k than to park it in an asset that doesn't appreciate. And of course, you have to factor in the risk that the price will actually drop. Risk isn't free either: it doesn't make sense to take a risk that you…

ROI on paying rent vs mortgage is negative due to no equity building and the opportunity cost of that money disappearing vs paying yourself with each principle portion of your mortgage payment.

We all need a place to live so a house serves a physical utility as well that other investments do not, in addition to being able to collect unlimited rent when the mortgage is eventually paid off eventually. I think there is a lot of upside to home ownership if it is financially feasible.

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

#312

Post by jointpdf »

mrep wrote: post #118
jointpdf wrote: post #61

Earlier quoted context omitted.

Housing (and construction) prices have been ballooning out of control everywhere for the last several years. Both major cities (DC, Boston, Portland, Seattle, Chicago, LA, Denver, San Diego) and secondary cities (Boise ID, Grand Rapids MI, many more) are all totally unaffordable. I’ve spent hundreds of hours researching different areas over the last year. Looking at sold homes from just 2-3 years ago, many seem like…

What data are you looking at? Median home price for Chicago (where I live incidentally) is 229,000, for Dallas is 225,000, for Houston is 197,000 according to this source [0] and those are the 3rd, 4th, and 5th largest metropolitan statistical areas in the United States and Dallas and Houston have both grown a whopping 19% in the past decade [1]. Trick is, they all still have plenty of land to build new homes on to k…

Here is some data backing up what I’ve been (mostly subjectively) observing. In particular, look at the skyrocketing median list/sale price (+10% YOY) and the YOY changes in sale price since ~2010. Also, medians are of course just an aggregate measure that does not tell the full story—low quality cookie cutter developments drag the medians down. Older homes in decent neighborhoods are even hotter.

[0]: https://www.redfin.com/blog/data-center/

[1]: https://www.zillow.com/research/zillow-weekly-market-report-...

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

#313

Post by jdm2212 »

rorykoehler wrote: post #301
jdm2212 wrote: post #240

Earlier quoted context omitted.

No, the guaranteed negative return is only if you expect rising inflation. Whether $1T in new money turns into inflation depends on what people choose to do with the new money. If they're all terrified about economic uncertainty, they won't spend the new money, and there won't be inflation. But you're right insofar as the Fed is trying to change inflation expectations by printing money. But so far they've failed beca…

It seems much of it got dumped into TSLA. Didn’t the fed announce they would run inflation a bit hot for a while just last week?

Even if a bunch of people used cheap money to buy TSLA, that means a bunch of other people now have lots of money they made selling TSLA.

So someone, somewhere, is sitting on cash, which is deflationary and not what you want in a weak economy.

The cure for that problem is cheap money plus expected inflation (cheap money so people can get cash, expected inflation so they go spend it). The Fed can make money cheap, but it can't force people to expect inflation. It can do stuff to encourage that expectation, though, and yeah it's doing just that.

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

#314

Post by ZoomerCretin »

athms wrote: post #308
mikem170 wrote: post #306

Earlier quoted context omitted.

> 1. Encouraging developers to build new properties, particularly properties for low- and medium-income tenants You forgot to mention zoning law which restrict the supply of housing a lot, much more than any wheeling and dealing cities may do with developers. Supply is simply not allowed to increase in many areas. It is not a free market, it is government controlled and the priority is to preserve/increase the proper…

As much as I want new housing, I don't want to live in a dense city. I have lived in apartments long enough to know I don't want to live in an apartment anymore. I was born and raised in the suburbs and I want to continue to live in one. I don't blame people living in single family homes not wanting multiple family homes built near them or fighting infill development. We really need to reduce the population. It will…

Then they can move further out. Your desire to not live near denser housing does not trump other's dire need for affordable housing.

If you're so concerned about carbon footprint reduction, you should be fighting as hard as you can to ban SFH policies and for pro-density policies, since land-use and long commutes are such massive contributors of climate change.

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

#315

Post by athms »

ZoomerCretin wrote: post #314
athms wrote: post #308

Earlier quoted context omitted.

As much as I want new housing, I don't want to live in a dense city. I have lived in apartments long enough to know I don't want to live in an apartment anymore. I was born and raised in the suburbs and I want to continue to live in one. I don't blame people living in single family homes not wanting multiple family homes built near them or fighting infill development. We really need to reduce the population. It will…

Then they can move further out. Your desire to not live near denser housing does not trump other's dire need for affordable housing. If you're so concerned about carbon footprint reduction, you should be fighting as hard as you can to ban SFH policies and for pro-density policies, since land-use and long commutes are such massive contributors of climate change.

>Your desire to not live near denser housing does not trump other's dire need for affordable housing.

The reverse is also true. Their desire for affordable housing doesn't trump people's desire to not live near denser housing.

>If you're so concerned about carbon footprint reduction...

I don't have children or pets. I have worked from home for the last 20 years.

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

#316

Post by ZoomerCretin »

athms wrote: post #315
ZoomerCretin wrote: post #314

Earlier quoted context omitted.

Then they can move further out. Your desire to not live near denser housing does not trump other's dire need for affordable housing. If you're so concerned about carbon footprint reduction, you should be fighting as hard as you can to ban SFH policies and for pro-density policies, since land-use and long commutes are such massive contributors of climate change.

>Your desire to not live near denser housing does not trump other's dire need for affordable housing. The reverse is also true. Their desire for affordable housing doesn't trump people's desire to not live near denser housing. >If you're so concerned about carbon footprint reduction... I don't have children or pets. I have worked from home for the last 20 years.

In cities and suburbs that are already built out, someone must draw the shortest straw. Desires and wants should always be trumped by need.

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

#317

Post by [deleted] »

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…

[deleted]

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

#318

Post by bradlys »

athms wrote: post #315
ZoomerCretin wrote: post #314

Earlier quoted context omitted.

Then they can move further out. Your desire to not live near denser housing does not trump other's dire need for affordable housing. If you're so concerned about carbon footprint reduction, you should be fighting as hard as you can to ban SFH policies and for pro-density policies, since land-use and long commutes are such massive contributors of climate change.

>Your desire to not live near denser housing does not trump other's dire need for affordable housing. The reverse is also true. Their desire for affordable housing doesn't trump people's desire to not live near denser housing. >If you're so concerned about carbon footprint reduction... I don't have children or pets. I have worked from home for the last 20 years.

Your own contributions do nothing in comparison to societal changes.

If I die (lowest footprint possible), it has almost no impact on society in terms of climate change. But if I change behaviors of many (through legislation...) then that is enormous in comparison.

Affordable housing that is also low on climate impact (higher density and close to places people need to go) should be prioritized over “I want 10 acres of land”.

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

#319

Post by charlesu »

OldHand2018 wrote: post #251
charlesu wrote: post #228

Earlier quoted context omitted.

The median home price doesn't mean much in Chicago. Most homes in the desirable neighborhoods are 1BR and 2BR condos and well over $300k or include outrageously high HOAs ($400 - $1K). There are thousands of sub $200k homes in the city but they're located in dangerous under resourced neighborhoods to the south and far west. In either case, you will pay 2% property taxes, which means comes out to $400 a month in prope…

"desirable neighborhoods" in Chicago is code for living in a bubble (should be very firmly noted that this is NOT race-related). Yes, you pay a lot more for that. There are neighborhoods in the city that have lower crime, faster access to downtown, higher median incomes, better-rated schools and lower house prices than many of the "desirable neighborhoods". The Near South Side is an obvious example. However, you can…

The Near South Side is a desirable neighborhood and the situation there is as I described. It's small condos with exorbitant HOAs. Do you mean Bronzeville?

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

#320

Post by sjg007 »

_Anken wrote: post #183
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…

> It obviously benefits buyers in non-hot markets. It's pretty nice to put $7500 down in the mid-west for a house. Unfortunately banks won't loan what they see as small mortgages like that. This leaves the lower priced homes only available to landlords buying cash. I live in a home like this myself - all the banks would happily loan me $215,000 with $35k down, but no bank would loan me $15,000 to buy a $50k house. Th…

Huh? This is nonsense. You can indeed buy a 50k house if the house appraises at that value. You can also get an improvement loan included to make it livable as well if necessary.
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