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Some Mistakes You Just Can’t Fix
Thanks to a multi-week decline in mortgage rates which helped catalyze a surprise increase in US pending home sales last month, "fresh" reads on the national home price indexes felt even more stale than usual on Tuesday.
Nevertheless, it's worth noting that annual price growth on the closely-watched S&P CoreLogic Case-Shiller gauges ran at the slowest pace in more than two years in November.
The 20-city index rose 6.8% from the same month in 2021, while the national gauge posted a 7.69% Yo
In some places, apartment rents are dropping sharply, something likely to continue with typical developers’ overshoot momentum:
https://www.denverpost.com/2023/01/25/apartments-metro-denver-vacancy-rate-falling-rents
Are these declines for new renters or do they included legacy tenants? I doubt the latter.
The solution will end up being prices being pretty much flat over a long period of time as incomes grow. There is little doubt that real prices of shelter will drop- asking them to drop rapidly would probably make the cure worse than the disease (2008-9 was a good demonstration of that). There is a fallacy that homeownership should be a goal for all. That is a policy error born out of the propaganda from the GOP and real estate lobbies. Once you push ownership rates into the high 60s or 70% you get some folks who are probably not great candidates for home ownership. There is nothing wrong per se with helping folks live in decent rental housing via a subsidy or by reforming zoning and encouraging construction of rental units for low and moderate income folks. The focus of policy should be helping folks live better not pushing people to buy real estate who may not be good candidates to do so.
“The US is the richest country in the history of the world. No one should be in a situation where they have to “find” $300.”
Can’t they just tap their “excess savings” for that $300?
Perhaps they could open “shell” entities in the names of family members and tap it that way?
Did you learn that technique at Trump University’s George Santos College of Business?
“As the familiar chart above (updated with today’s Case-Shiller figures) suggests, shelter inflation is about to recede materially, which is obviously good news for the Fed.”
Any chance Case-Schiller explained WHY they think this precipitous drop of 10% over a period of 8 months is going to occur?
okay i somehow doubt that “The US is the richest country in the history of the world”