Yes, the Fed matters a lot; nobody disagrees with that.

[an]

[quote=deadzone][quote=an]
What’s the % of home owners are over-extended and up to their eyeballs in debt? Last I check, it’s much harder to get a loan today than 15 years ago. No liar loans, no no-docs loan, have to have a good LTV and cash reserve. So, would love to see data on this statement.

I sincerely hope you’re right and we’ll see another 2008 style crash. Although, it seems like you think it’ll be even worse. Fingers cross that you’re right.[/quote]

Revolving credit at all time high, jumped 20% in April. Meanwhile interest rates going to the moon. Not a good recipe for housing market or economy in general.

https://www.cnbc.com/2022/06/09/credit-card-balances-spike-after-stimulus-checks-helped-reduce-debt.html%5B/quote%5D
Who are the people with the most removing credit? How many of them are home owners? How long have they own their home? Interest going to the moon doesn’t mean much to anyone who have locked into their 30 years fixed at 3%.

[Anonymous]

Average 30 year fixed over 6% now according to MBD. Damn this is getting ugly fast!

[Anonymous]

[quote=an][quote=deadzone][quote=an]
What’s the % of home owners are over-extended and up to their eyeballs in debt? Last I check, it’s much harder to get a loan today than 15 years ago. No liar loans, no no-docs loan, have to have a good LTV and cash reserve. So, would love to see data on this statement.

I sincerely hope you’re right and we’ll see another 2008 style crash. Although, it seems like you think it’ll be even worse. Fingers cross that you’re right.[/quote]

Revolving credit at all time high, jumped 20% in April. Meanwhile interest rates going to the moon. Not a good recipe for housing market or economy in general.

https://www.cnbc.com/2022/06/09/credit-card-balances-spike-after-stimulus-checks-helped-reduce-debt.html%5B/quote%5D
Who are the people with the most removing credit? How many of them are home owners? How long have they own their home? Interest going to the moon doesn’t mean much to anyone who have locked into their 30 years fixed at 3%.[/quote]

Well many folks who bought recently at these all time crazy prices are already stretched thin.
Also, many homeowners took out HELOC in last couple years for remodeling, etc. That was huge during Pandemic.
And if these are Tech workers, their portfolios have been dropping big time this year as the value of their stock options are going up in smoke.

[sdrealtor]

Thats a lot of stuff to unpack with no understanding or data. You’re like a headline machine

[Anonymous]

[quote=sdrealtor]Thats a lot of stuff to unpack with no understanding or data. You’re like a headline machine[/quote]

Things aren’t really complicated at all.

Interest rates going up dramatically.
Stock market tanking
crypto market tanking
RE is on deck

[an]

[quote=deadzone]Well many folks who bought recently at these all time crazy prices are already stretched thin.
Also, many homeowners took out HELOC in last couple years for remodeling, etc. That was huge during Pandemic.
And if these are Tech workers, their portfolios have been dropping big time this year as the value of their stock options are going up in smoke.[/quote]
Data please. YOu can’t be stretch thin and still get a loan today. Do you have proof that underwriting has changed to allow people to be stretched thin?
HELOC for remodeling, proof/data?

[Anonymous]

[quote=an][quote=deadzone]Well many folks who bought recently at these all time crazy prices are already stretched thin.
Also, many homeowners took out HELOC in last couple years for remodeling, etc. That was huge during Pandemic.
And if these are Tech workers, their portfolios have been dropping big time this year as the value of their stock options are going up in smoke.[/quote]
Data please. YOu can’t be stretch thin and still get a loan today. Do you have proof that underwriting has changed to allow people to be stretched thin?
HELOC for remodeling, proof/data?[/quote]

People have always been able to take debt to be stretched thin. That worked as long as the asset bubbles (RE, stocks, etc) kept rising and the economy was good.

Now asset prices are cratering and the economy is about to go into recession. A lot of margin calls are on the way. We’ll soon find out who has been swimming naked as the tide is most definitely on the way out.

[sdrealtor]

Funny thing is the cnbc article if you actually read it past the headline has a graph showing household debt to income is just off four decades lows and still extraordinarily low from a historical perspective. It disproves your stretched thin comment. Darn data

[an]

[quote=deadzone][quote=an][quote=deadzone]Well many folks who bought recently at these all time crazy prices are already stretched thin.
Also, many homeowners took out HELOC in last couple years for remodeling, etc. That was huge during Pandemic.
And if these are Tech workers, their portfolios have been dropping big time this year as the value of their stock options are going up in smoke.[/quote]
Data please. YOu can’t be stretch thin and still get a loan today. Do you have proof that underwriting has changed to allow people to be stretched thin?
HELOC for remodeling, proof/data?[/quote]

People have always been able to take debt to be stretched thin. That worked as long as the asset bubbles (RE, stocks, etc) kept rising and the economy was good.

Now asset prices are cratering and the economy is about to go into recession. A lot of margin calls are on the way. We’ll soon find out who has been swimming naked as the tide is most definitely on the way out.[/quote]Again, who are these people? What’s the % of these people are home owners vs renters?

[Anonymous]

We’ll find out soon, as the tide goes out.
All I know is the bubble is popping, and the bubble was ginormous. When bubbles pop, it triggers margin calls, recessions and other cascading effects to the economy and personal finance. We’ve seen this before.

[sdrealtor]

When?

[an]

[quote=deadzone]We’ll find out soon, as the tide goes out.
All I know is the bubble is popping, and the bubble was ginormous. When bubbles pop, it triggers margin calls, recessions and other cascading effects to the economy and personal finance. We’ve seen this before.[/quote]
How much decline in housing price are we talking about here?

[an]

[quote=gzz]“ What I am curious about is how a bank would fund a mortgage at 6% when inflation is at 9%.”

They borrow at 0% in checking and 3% in savings accounts, loan at 6%.

There’s no human right to get a return on your savings above inflation. China has had inflation that is double savings account rates for about 30 years now.

All the recent drama is making people forget the long term worldwide trend is aging demographics and a glut of savings.[/quote]
https://www.nbcsandiego.com/news/business/money-report/millennials-and-gen-zers-do-want-to-buy-homes-they-just-cant-afford-it-even-as-adults/2969830/?fbclid=IwAR0I75Q8f5lN2dgeH2tHCTj_x8fZPZKxqr07v8Iov1qcdUwYBS9A5jEe5vg

Looks like there’ll be a steady stream of renters for the foreseeable future.

[Anonymous]

[quote=an][quote=deadzone]We’ll find out soon, as the tide goes out.
All I know is the bubble is popping, and the bubble was ginormous. When bubbles pop, it triggers margin calls, recessions and other cascading effects to the economy and personal finance. We’ve seen this before.[/quote]
How much decline in housing price are we talking about here?[/quote]

At a minimum I expect all Covid appreciation to get wiped out, that is a logical starting point. But beyond that who knows. Depends on what the Fed does. They completely control and manipulate the economy and housing market. They have not even begun to taper their MBS holdings yet and the market is already cratering.

The Fed currently owns 2.7 trillion in MBS, which is somewhere around 30% of the entire market, pretty crazy. Without Fed support there is no telling how low things could go. The entire market has been fake since 2009

[sdrealtor]

So says the guy who has never participated in it.

Betting window remains open

[Author]

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