Have the housing bears lost? S896 passes the Senate

[ucodegen]

Actually S896 is very bearish. Banks will now take into account that they may have to eat additional losses on what is a securitized loan. Their response will be to increase interest rates on all of these loans and treat them more like seconds than fully securitized. (risk adjustment to the interest rate)

It is short time bullish because the houses that are near NOD or at NOD will never make it to the market, drying up some of the potential inventory, but long term it may be a total disaster. I estimate that the amount it will cost in terms of interest is an additional 1% to 2% on the interest rate.

[(former)FormerSanDiegan]

[quote=davelj][quote=Russell]I really don’t see any possible way to see “housing bears have lost”, bills passing or no bills passing. I just don’t get that. Maybe it is just a problem of semantics. Perhaps, what is meant is that, “housing bears lose this round”?

[/quote]

I agree. The housing bears have already won. Although perhaps the housing uber-uber bears will have to revise their outlook… a little bit. The govt can’t keep prices from reverting to the mean… but it can have an impact on how far prices over-correct.
[/quote]

davelj, you nailed it. I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.

[(former)FormerSanDiegan]

[quote=davelj][quote=Russell]I really don’t see any possible way to see “housing bears have lost”, bills passing or no bills passing. I just don’t get that. Maybe it is just a problem of semantics. Perhaps, what is meant is that, “housing bears lose this round”?

[/quote]

I agree. The housing bears have already won. Although perhaps the housing uber-uber bears will have to revise their outlook… a little bit. The govt can’t keep prices from reverting to the mean… but it can have an impact on how far prices over-correct.
[/quote]

davelj, you nailed it. I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.

[(former)FormerSanDiegan]

[quote=davelj][quote=Russell]I really don’t see any possible way to see “housing bears have lost”, bills passing or no bills passing. I just don’t get that. Maybe it is just a problem of semantics. Perhaps, what is meant is that, “housing bears lose this round”?

[/quote]

I agree. The housing bears have already won. Although perhaps the housing uber-uber bears will have to revise their outlook… a little bit. The govt can’t keep prices from reverting to the mean… but it can have an impact on how far prices over-correct.
[/quote]

davelj, you nailed it. I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.

[(former)FormerSanDiegan]

[quote=davelj][quote=Russell]I really don’t see any possible way to see “housing bears have lost”, bills passing or no bills passing. I just don’t get that. Maybe it is just a problem of semantics. Perhaps, what is meant is that, “housing bears lose this round”?

[/quote]

I agree. The housing bears have already won. Although perhaps the housing uber-uber bears will have to revise their outlook… a little bit. The govt can’t keep prices from reverting to the mean… but it can have an impact on how far prices over-correct.
[/quote]

davelj, you nailed it. I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.

[(former)FormerSanDiegan]

[quote=davelj][quote=Russell]I really don’t see any possible way to see “housing bears have lost”, bills passing or no bills passing. I just don’t get that. Maybe it is just a problem of semantics. Perhaps, what is meant is that, “housing bears lose this round”?

[/quote]

I agree. The housing bears have already won. Although perhaps the housing uber-uber bears will have to revise their outlook… a little bit. The govt can’t keep prices from reverting to the mean… but it can have an impact on how far prices over-correct.
[/quote]

davelj, you nailed it. I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.

[EconProf]

Good point Ucodegen. Anything that hurts lenders will show up in the future in the form of higher interest rates. So any near-term benefits are offset by higher future interest rates, directly hurting prices. Thank you, politicos. The law of unintended consequences strikes again.

[EconProf]

Good point Ucodegen. Anything that hurts lenders will show up in the future in the form of higher interest rates. So any near-term benefits are offset by higher future interest rates, directly hurting prices. Thank you, politicos. The law of unintended consequences strikes again.

[EconProf]

Good point Ucodegen. Anything that hurts lenders will show up in the future in the form of higher interest rates. So any near-term benefits are offset by higher future interest rates, directly hurting prices. Thank you, politicos. The law of unintended consequences strikes again.

[EconProf]

Good point Ucodegen. Anything that hurts lenders will show up in the future in the form of higher interest rates. So any near-term benefits are offset by higher future interest rates, directly hurting prices. Thank you, politicos. The law of unintended consequences strikes again.

[EconProf]

Good point Ucodegen. Anything that hurts lenders will show up in the future in the form of higher interest rates. So any near-term benefits are offset by higher future interest rates, directly hurting prices. Thank you, politicos. The law of unintended consequences strikes again.

[patientrenter]

[quote=FormerSanDiegan] …I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.
[/quote]

Hmmm…. housing is cyclical. I think comparing each stage of the current house price cycle to the corresponding stage of the last and prior cycles makes more sense than simply calculating the % drop from the last peak. And that’s doubly true because the last housing peak was the highest and most widespread – global – in recorded history. So compare to 1996 prices, increased for CPI inflation since then. If we are still above that level, then we haven’t even returned to a trough appropriate for the lesser peak before the last.

[patientrenter]

[quote=FormerSanDiegan] …I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.
[/quote]

Hmmm…. housing is cyclical. I think comparing each stage of the current house price cycle to the corresponding stage of the last and prior cycles makes more sense than simply calculating the % drop from the last peak. And that’s doubly true because the last housing peak was the highest and most widespread – global – in recorded history. So compare to 1996 prices, increased for CPI inflation since then. If we are still above that level, then we haven’t even returned to a trough appropriate for the lesser peak before the last.

[patientrenter]

[quote=FormerSanDiegan] …I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.
[/quote]

Hmmm…. housing is cyclical. I think comparing each stage of the current house price cycle to the corresponding stage of the last and prior cycles makes more sense than simply calculating the % drop from the last peak. And that’s doubly true because the last housing peak was the highest and most widespread – global – in recorded history. So compare to 1996 prices, increased for CPI inflation since then. If we are still above that level, then we haven’t even returned to a trough appropriate for the lesser peak before the last.

[patientrenter]

[quote=FormerSanDiegan] …I find it funny that in an environment where the median price has dropped by 40% that anyone would think that bears have lost.
[/quote]

Hmmm…. housing is cyclical. I think comparing each stage of the current house price cycle to the corresponding stage of the last and prior cycles makes more sense than simply calculating the % drop from the last peak. And that’s doubly true because the last housing peak was the highest and most widespread – global – in recorded history. So compare to 1996 prices, increased for CPI inflation since then. If we are still above that level, then we haven’t even returned to a trough appropriate for the lesser peak before the last.

[Author]

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