GSE Debt, Loan Limits & Why Prices Must Decline
GSE & FHLB Debt...
Unlike ABCP & subprime MBS, at the moment, at least GSE's FNMA, FHLMC and the FHLB can still sell their debt to foreigners...
Comments on raising GSE limits as a form of bailout...
"There are those who will argue that you must have a jumbo to buy in places like CA, but the counter argument to that is that perhaps prices got way out of hand in those places and need to come down to earth."
"Do we really need an implicit federal guarantee to help the wealthy buy homes?"
"And if $417k buys a starter home in CA, then clearly prices are not aligned with incomes--that will be changing over the next couple of years. Either salaries will rapidly rise or home prices will fall. I'm guessing the latter."
One of our top ten reasons why: it is different this time...
Across the country, housing prices have risen on average about 45% over the past six years, according to the National Association of Realtors.
By contrast, the median income for working-age households (those headed by someone under 65) is down 4% since 2000, according to an Economic Policy Institute analysis of Census Bureau data.
That's a drop of about $2,400 a year. And this is one of the main reasons why Real Estate can only decline in value, for quite some time to come.
Unlike ABCP & subprime MBS, at the moment, at least GSE's FNMA, FHLMC and the FHLB can still sell their debt to foreigners...
Comments on raising GSE limits as a form of bailout...
"There are those who will argue that you must have a jumbo to buy in places like CA, but the counter argument to that is that perhaps prices got way out of hand in those places and need to come down to earth."
"Do we really need an implicit federal guarantee to help the wealthy buy homes?"
"And if $417k buys a starter home in CA, then clearly prices are not aligned with incomes--that will be changing over the next couple of years. Either salaries will rapidly rise or home prices will fall. I'm guessing the latter."
One of our top ten reasons why: it is different this time...
Across the country, housing prices have risen on average about 45% over the past six years, according to the National Association of Realtors.
By contrast, the median income for working-age households (those headed by someone under 65) is down 4% since 2000, according to an Economic Policy Institute analysis of Census Bureau data.
That's a drop of about $2,400 a year. And this is one of the main reasons why Real Estate can only decline in value, for quite some time to come.
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