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Americans Learn The Path To Lower Mortgage Rates May Go Through Recession
As promised, the Trump administration's bringing down borrowing costs for families. One recessionary data point at a time.
US mortgage rates are now "just" 6.67%, tied for the lowest since October, after a sixth straight weekly decline.
The reprieve helped catalyze a meaningful increase in both purchase apps and refis.
As the figure shows, rates haven't risen since mid-January.
One one hand, this is good news, especially ahead of the spring homebuying season. Rates are now nearly half a po
Housing crisis just needs a deep recession…GFC-style – to bring down both mortgage rates and home prices. But then of course without jobs and with asset values decimated, not so many people will be able to buy….and we can have another great buying opportunity for the wealthy, and private equity can snap up another chunk of the housing stock.
If in fact a shallow recession is part of a genius plan from Scott & Donnie…well, be careful what you wish for. Such plans are notoriously difficult to modulate to avoid excess and achieve a Goldilocks scenario. (See: pandemic stimulus, for example! )
To be clear, I don’t think anyone wants to see another 2007-08 style “meltdown” in the housing market just to see home prices come down to “more affordable” levels. Post GFC is when we really saw homelessness begin to climb in this country. What we need is an orderly decline in home prices–and/or mortgage rates–without a substantial increase in unemployment. That’s not an easy get. I have heard stories that commercial investors are ready to pounce on price declines in residential real estate, as many of them now see commercial real estate as mostly unprofitable. That would necessitate government programs to help residential buyers–and first-time buyers in particular–buy homes. Something that does not appear to be forthcoming from this administration.
To be clear, i was not advocating another GFC style meltdown, just throwing aome sarcasm in pointing out the risk of blunt-force policy changes effected by populist politicians!
Queue pivot to bullying Jerome Powell into ending balance sheet runoff.