Why The Federal Reserve Should Keep Its Grubby Mitts Off The Mortgage Market

It's highly unlikely that the solution to a problem caused in part by poor Federal Reserve policy can come via yet another policy intervention by Fed officials.

Washington Post Finally Learns What A Recession Is And Swears It ‘Could Be Good For You Financially’

The Washington Post's 'seven silver linings' to a recession are just deceptions that pretend struggling Americans are OK financially.

Zillow says housing prices have dropped for the first time in a decade



An analysis by real estate company Zillow found that housing prices in the United States had dropped for the first time in a decade after skyrocketing in recent years and driving many out of the market for home ownership.

The report from the online company found that their Zillow Home Value index had fallen by 0.1% from June to July.

"The market is quickly rebalancing. With buyers' purchasing power diminished by nearly two years of double-digit price growth and higher mortgage rates, competition for homes is dropping off," the report said.

The fall in pricing came after a report from the National Association of Realtors said that housing sales had cratered 20% from the previous year in July, and 6% from the previous month.

Despite the small decline in pricing, the value of the typical home in the U.S. was 16% above its pricing from last year, or $357,107.

Experts say the sudden rise in real estate loan rates has priced many buyers out of the market and led to less demand for housing.

"This slowdown is about discouraged buyers pulling back after the affordability shock from higher rates. As prices soften, many will renew their interest, and we will continue our progress back to 'normal,'" said Zillow chief economist Skylar Olsen.

Zillow has also projected that U.S. home prices will increase from 2022 to 2023, but only by 2.4%, far less than they had previously predicted.

A separate analysis by Redfin found that some markets that had experienced a boom during the pandemic had seen a spike in home sellers dropping their prices. Among the worst was Boise, Idaho, and Tampa, Florida.

The Federal Reserve has raised the national baseline rate in an attempt to jolt the economy from spiking inflation from government overspending during the coronavirus pandemic. Fed Chairman Jerome Powell has indicated that they may continue to raise rates in order to prevent the economy from continuing to overheat.

"It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all," said Powell in July.

Critics fear the move may shove the nation into a recession, especially since the gross domestic product has decreased in two consecutive quarters, the generally accepted definition of a recession.

Here's more about the changing housing market:

We're witnessing a housing recession: Economistwww.youtube.com

How Easy Federal Money Could Be Laying The Groundwork For Another Housing Crash

Because the federally blown asset bubbles have also hit home prices, Washington now will make housing more ‘affordable’ by having taxpayers take on more risk.

Big investment companies are buying houses at high prices and renting them out, squeezing would-be homeowners



Rising housing prices across the nation are putting first-time homebuyers in a bind.

While record-low interest rates make mortgage financing incredibly easy, few people can actually afford to take advantage of these loans because prices for houses are too high. Part of the problem has to do with soaring lumber costs, which is driving up the price of building. There's also a labor shortage for builders, which means many would-be buyers fighting with each other to find pre-owned homes, which is driving up those prices.

Those that can afford to buy a house are having trouble finding one for sale before someone else buys it. Another dimension of the problem is these first-time buyers aren't just competing amongst themselves, they're also facing competition from large investment companies who are buying up houses to turn them into single-family rentals, blocking many Americans from becoming homeowners.

A new report from the Wall Street Journal details "the rise of big investors as a potent new force in the U.S. housing market." The story covers the example of Fundrise LLC, an online property-investing platform that purchased 124 houses in Conroe, Texas, for $32 million, paying building firm D.R. Horton Inc. "roughly twice what it typically makes selling houses to the middle class" — illustrating how home builders stand to make more money by selling houses to investment firms instead of middle-class Americans who want to own their first home.

The report goes on to detail how "yield-chasing investors are snapping up single-family houses to rent out or flip," contributing to the scarcity of houses for sale and driving up prices for everyone.

According to one estimate from John Burns Real Estate Consulting, as many as 1 in 5 houses sold in the nation's top housing markets is purchased by someone who will never move in. As a result, the consulting firm expects prices to continue to rise, climbing 12% this year and at least 6% more in 2022.

"You now have permanent capital competing with a young couple trying to buy a house," said company CEO John Burns. "That's going to make U.S. housing permanently more expensive."

Burns notes there are more than 200 big money companies and investment firms competing with families and first-time buyers for houses, including titans of finance J.P. Morgan Asset Management and Blackrock Inc.

Important changes are happening in the housing market because of the involvement of big money investors. The record-level home prices driven by firms paying much more than regular people can afford for these homes, or maybe even more than the homes are worth, could lead to a market bubble.

The Journal's report compared the speculative bubble created by these investors to the housing bubble that began in 2004 and 2005 and ended with the 2008 financial crisis.

Also, many of the houses bought by these companies are not being sold to potential homeowners. Entire neighborhoods bought by Wall Street are being turned into rentals, leaving few options for those who want to own a home.

With prices rising and big companies outbidding the middle class for the few houses that are available, how are families ever going to afford to own a home?

INFLATION collusion? What's REALLY fueling the rising food & housing prices?



The prices of our houses and food are already rising fast, but they will skyrocket to record highs if we don't fix the problem soon. So what's causing the inflation?

On the radio program this week, Glenn Beck said he doesn't believe it's the fault of our loggers, farmers, or truckers — many of them are really struggling. But the big corporations that control these industries are making record profits, all while the Biden administration is making some very odd decisions that could make the crises even worse.

Watch the video below for more details:


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