This page has been archived and commenting is disabled.
Housing - There's No Way Out
Submitted by Lee Adler via The Wall Street Examiner,
The Fed has created permanent housing crisis from which there is no escape.
Total US housing starts peaked in 1972. This chart shows actual (not seasonally manipulated) total starts, multifamily starts, and single family starts for each September since then.
I have 3 observations.
- The recovery in total starts since 2010 has regained less than the post 1972 average.
- Multifamily starts are near the peak levels of the 1978-87 decade, which is to say, nearing “as good as it gets,” and unlikely to be additionally accretive for the US economy.
- There is no single family housing market. It has recovered only to 1982 recession levels. Prior to the 2008-2012 housing depression, that was the worst housing market in the US since single family starts reporting began in 1959. The single family housing industry in the US is still in a depression.
This can only leave us to wonder what would happen if mortgage rates were to actually materially rise. You can bet that the Fed is wondering the same thing.
If rates did start rising, the housing industry might be stimulated a little at first as buyers and multifamily developers who were on the fence jump into the market to beat rising rates. But once that reluctant pool of fence sitters is exhausted, there would be no more buyers. The next step would be collapse.
The Fed’s only option would then seem to be more QE. We know that economies develop a greater and greater tolerance that drug over time. Japan and Europe are perfect cases in point. They are the walking dead. By keeping rates at zero the Fed has left itself, and us, no way out.
»
- 56281 reads
- Printer-friendly version
- Send to friend
- advertisements -
I pay 4.75% on my 5th wheel.
Hey didn't the Feds announce a "new deal" in regards to 3% down?
What could possibly go wrong?
The "Fab" should be out on parole by the time the crap can be bundled and resold to stupid French bankers.
That's only for if you're not a huhwhite privilege.
How to solve this? Simple ..
END THE FED!
Prices would drop immediately up to 40%. Not only would wages go up, but there would be so many jobs, for not only the 100+ million that need good jobs, but we might have to attractive some foreigners on visas, even after we purged the 50+ million in illegals ..
Say it can't be done? Well, the window of opportunity may be closing fast. And after that, we could be looking at an 100+ years new dark age ..
http://www.veteranstoday.com/2015/10/21/rare-window-of-opportunity-for-a...
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)
If rates did start rising, the housing industry might be stimulated a little at first as buyers and multifamily developers who were on the fence jump into the market to beat rising rates. But once that reluctant pool of fence sitters is exhausted, there would be no more buyers. The next step would be collapse.
The Fed’s only option would then seem to be more QE. We know that economies develop a greater and greater tolerance that drug over time. Japan and Europe are perfect cases in point. They are the walking dead. By keeping rates at zero the Fed has left itself, and us, no way out."
Yet, the American people permit them to remain in power...
Folks, we STARTED as a superpower economy at the advent of the bonsai charge of globalist outsourcing, which correlates pretty well with shack racket economics.
Though it takes a long time for something as big as the once-mighty American middle class economy to completely vaporize, it IS almost complete...and STILL...no heads rolling.
No uproar from the broken masses.
No sixties-style marches to demand a new course--or to AT LEAST end the insane one we're on.
Nothing but frustrating procrastination...over YOUR future.
Your KIDS future.
Does anyone seriously think we're going to get better via apathetic complacency??
Has that happened yet??
Another election, you say...a YEAR from now?
You think we have that long?
You think THAT'S going to change anything?
Really??
m
This can only leave us to wonder what would happen if mortgage rates were to actually materially rise. You can bet that the Fed is wondering the same thing.
they won't, and, they aren't.
Actually we can fuck our way out of it.
The ONLY "way out" is a MASSIVE crash in house prices.
Then people can afford to buy a house.
Oh, and when homeowners biggest expense is only 1/8 to 1/3 as much, all that extra money they would have spent on mortgage payments (or rent), can now be spent on "everything else".
That "everything else" IS the economy.