-fed interest rates are as low as possible before just going negative
-banks are borrowing this money
-banks are loaning this money out on mortgages
-federal gov't is buying the mortgage backed securities that result from the loans


banks are merely processing the loans before selling the mortgages back to the gov't at 120bn a month. 120 BILLION a month.

They assume no risk but are taking all of the up front profit. But that's not all...

iTs NoT a BuBbLe

if you hear someone say this, rest assured, they'd lead you into a back alley to steal your kidney if it meant they got a free fifth of jack out of it.

People are refinancing their old homes in large droves to be able to afford a home somewhere else, while falsely stating that they're going to remain in residence in the old home. This can mean a few things, but its a high risk that a significant portion of homeowners in exodus intend on making rent to be able to afford their new higher mortage....which brings me to my next point

No OnE iN fOrEbEaRaNcE iS uNdErWaTeR

great. No one asked if they were, because its evident they will be soon. And what happens when they are? The 5% of homeowners in forebearance will have to make a decision to keep supporting a house that is no longer worth what they paid, which as we saw in 2008, a significant portion panic sell for no good reason.

InVeStOrS aRe StAbLe

the fuk they are. As soon as fed raises interest rates, real estate will not have a favorable return any more. Single family homes owned by large funds are going to get liquidated. We can all see how fast they moved into the industry; they will pull just as fast out.

There are a lot of assumptions being made that all revolve around the same linch pin of "fundamentals" that are some how not tied to reality. Real estate blogs are not talking about how the lending cycle is corrupt much in the same way as the early 2000s, since banks do not have to hold the bag, they will keep producing mortgages to fill the MBSs. That is EXACTLY what caused the early 2000s market crash. To connect this to a causal mechanism, cost of living has increased dramatically, yet banks HAVE DRAMATICALLY INCREASED THE DTI they lend at. Prime is the new subprime....just fukking lmao

Hold on to your ass holes. lettuce be real tea and acknowledge the fact that our record breaking economy is only due to record unrealized inflation and will break down imminently. If you can't see this, then you're a hopeless romantic.

Neat.

So if me and the mrs. have been waiting to possibly invest in either a multi family unit or commercial real estate we should wait for this to pop and buy at a discount?

should I refi and buy Bitcoin ?

Commercial real estate has its own set of issues, but it looks like it does have the same inherent problem with MBSs corrupting the feedback of responsibility that banks are supposed to hold. However, it doesn't look like commercial real estate is in as much of a bubble since tech has been putting brick and mortar out of business for a while...analysis has to be more locallol

people dump into btc as soon as chit goes south so maybe lmao

just don't try to short sell or your bank will sue you

Multi family is totally different market, srs.

Also unless you’re buying cash this will go hand in hand with dramatically higher mortgage rates.

Govt is allowing Chinese foreign investors to buy up all your homes, jacking up the prices so that you have to borrow 3 times as much to afford to live.

This fits legal definition of genocide.

Convention on the Prevention and Punishment of the Crime of Genocide
Article II

In the present Convention, genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:

a. Killing members of the group;
b. Causing serious bodily or mental harm to members of the group;
c. Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or IN PART;
d. Imposing measures intended to prevent births within the group;
e. Forcibly transferring children of the group to another group.

lending standards and criteria are extremely high right now, no where close to as loose as they were in 2008

these banks aren't handing out mortgages to bums

foreign investors have been sitting this out

its pretty bad when china stops their efforts of hegemony for your domestic market to correct

bum is relative

you can get a 50+% dti mortgage jumbo loan over 1.3 mil no issue lmao at 150k income

everyone's credit was raised a few years ago when they changed the model from an 800pt system to 850

those two factors alone were contributing to a bubble from 2015 on....

Fck banks I swear. Bring on the crypto revolution.

Nah.

In the last few months homes have increased 30%+...for someone to be in forbearance and be underwater at some point would mean the market would have to drop SIGNIFICANTLY. I dont believe you can claim forbearance anymore and havnt been for little while, so who would it really affect? Anyone buying a home in the last year? The market would have to drop even more significantly

A 30% rise in months is natural but a 30% fall in more time isn't? Its literally the tail end of a classic exuberance model lmao

not sure yet. I sold both my houses this year. I'd rent them out but rentals don't cover cost of ownership in luxury areas.

giga cope. Fed already said interest rates aren’t increasing until 2024. It’ll run up so much by then that even when it pops it’ll still be at ridiculous valuations.

Buying at the top of the bubble! I'm a savvy real estate investor

supported by what demand?

What will pop the bubble?

Hike in interest rates?

House if true

repped op,rare,worthy thread for blue collar miscers like me in educational purposes.

I'm not sure if another housing crash will happen soon, but can you imagine a flood into crypto at the same time real estate popped? 10s of Millions of new millionaires looking to buy up great deals everywhere. Makes me wonder if a huge influx of immigrants from countries with the most crypto holders would happen. Maybe China and India?


Edit: I'm seeing the top five are

The United States
Romania
China
Spain
Japan

Professional economist here and OP is a wizard. Best explanation I’ve seen so far, srs.

Pro-tip, watch for Wages and Salaries (it’s an official economic indicator) growth to get surpassed by the 30 year prime. When interest rates get above that level this whole thing goes belly up. Bet PE etc. are watching that same marker.

Until then if the Fed is printing, they’re making money. OP’s point is exactly correct as well about them immediately getting out. You know who can’t get out quickly and get left holding the bag? Families that extended themselves during the run up, have two houses that require a renter to afford both mortgages, or just a family that bought towards the peak and bought too big and will be underwater as FUK on a large mortgage that’s stressful to begin with.

im a simple man

i see still high unemployment and shuttered businesses in this cuck state

and i hear of people getting into bidding wars and offering 10s of thousands above asking price just to get a house


i know these two dont match up and some fukery is going on.


lol people asking me if i am going to buy a house soon. these retards dont understand a correction or crash is eminent

Good post. Real estate is obviously a mess right now.

I always hear “but this is different from 2008 cause bank balance sheets are much cleaner”, but based on what OP is saying, the banks are pretty irrelevant (middle men) and sounds like this time when chit hits the fan it is just going to be the gov holding the bag (and they will pass it on the the tax payers). Is that what you are thinking OP?

this

People need to understand that it is a cycle. OP has failed to realise this.

If interest rates remain low until 2024, but inflation increases, people will want to park their money in assets such as real estate. As inflation increases, so may interest rates. When interest rates rise, landlords tend to increase the rent. As rent increases and the cost of buying property falls relative to renting, some tenants will look at buying, rather than renting, thereby increasing demand and raising property prices...and so it goes. Of course, there can be other factors at play (such as govt restricting supply) but this is the basics of it.

Great thread OP.

When do you predict it to happen? An educated guess is fine. Srs

It could be a decade before we see the downfall, or it could be couple years?

My friends in the business say cash out refinances aka borrowing money from yourself is also happening at record levels


Consequences of this?