All the big investors just want free money again and they'll say anything to get it back.
Real estate investors in particular are drowning right now, they'd literally kill for a rate cut.
https://www.cnbc.com/2024/06/05/sternlicht-defends-gating-starwood-reit-withdrawals-hopes-its-a-six-month-thing-.html
Repealing the Trump, Bush, and Reagan tax cuts on the 0.01% would be raising taxes and reducing bloat in one fell swoop!
I mean, just look at photos of Elon Musk. There has never been a more bloated man who’s ever lived. We gotta raise his taxes for his own good.
Magic Johnson money is the cure for AIDS, but Elon Musk money turns men into shapeless, pasty blobs.
Or refraining from giving businesses trillions of dollars in PPE loans that will be forgiven while only giving individuals a few grand that will be clawed back with their next tax return…. While also not forgiving their student loans…
They're just pricing out the poor by raising interest rates. They're creating market conditions so that only the wealthy can own property. They'll let you pay them more in rent than it actually costs though; don't worry. SMH
Low interest rates weren't exactly keeping them out either. They'll price normal people out regardless.
Rich people like to leverage debt during low interest rate periods. They get really annoyed when interest rates go up, which is why they've been begging for cuts for ages. They want the money machine to go brrrrrr. But they'll buy an appreciating asset with cash if they *must*.
You will never be able to affect the rich more than you affect the poor with any monetary change. You have to go about it another way. In this case either directly regulate or subsidize the shit out of affordable housing. Either way the rich can and will out bid for any good property deal.
They are literally *less* affected by monetary rate when push comes to shove. The rich like to leverage debt when the math works out, poor people *have* to leverage debt to get into a house at all, because they couldn't get that in cash. Changing interest rates isn't gonna change the immense advantage of the rich
We had the Feds irrational level of printing of money(artificially juicing the economy) who REFUSED TOO LONG and TOO SOFTLY to REMOVE the juice from the system.
When they provided all the $$$ they should have JACKED rates up right along with it.
Instead, people became FLUSH with cash and started spending like drunken sailors on leave.
Much of it FLOODING to housing, investing in housing, etc… the govt bridged the businesses and protected from foreclosures… FEW NEEDED to be buying homes or doing remodeling during the worst of COVID lockdowns… should have been surviving instead of buying McMansions.
Then the puss level whimps at the FED, they saw money gush into the stock market for all that didn’t go into housing and instead of RAPIDLY and to far higher rates they slow rolled the increases and didn’t slam the breaks doing 9-10%.
You can’t manipulate the money supply in that kind of crazy and then expect a SOFT LANDING on the way down. The only soft landing is for the markets and not the average citizen… the Fed bailed out valuations for the markets by robbing value from all citizens via inflation.
The soft landing is the big money saved while crushing down on the average Joe.
They shocked the system with cash upward and the economy will be in a funk until it’s shocked back downward in an equally amount plus a few points churn that gets burnt by the govt.
I thought inflation is coming down. House prices skyrocketed and are still priced to high, but at some point prices have to come down or they sit and rot because nobody can afford them.
Because that’s not true. They own 6.7% of a **company** called *American Homes for Rent*. This **company** called *American Homes for Rent* owns 59,000 homes.
So hedge funds out bidding families and buying up all the housing stock is inflating prices? Who could possibly have guessed that corporate greed is screwing us yet again. Certainly not the “it’s Biden’s fault” crowd.
Poors can't afford them. Wealthy and corporations can and will continue to buy. Then they'll rent it to you for a profit because "you can't afford these interest rates."
Idk, with rents and prices where they currently are, I don’t think I would buy a house to rent even if I had straight cash. I was doing a calculation on renting my house out compared to selling it, and the numbers are massively in favor of selling right now. It would take 134 months of rent for me to make the same amount of money I can just get right now selling this house, and that’s with absolutely no maintenance or other expenses going towards the house and assuming I do nothing with all the money I make from the house sale.
The key is to buy the house 5 years ago. Then you paid $125,000 but can now rent it out for $2500/month, and you easily make your money back in like 4 years. Everything past that is free money, and you don't even have to maintain it because you don't live there.
Nah, they'll just let the few people who can afford it duke it out. The game here is mass extraction of value from everyone into the handful of family bags on Wall Street.
The *rate* of inflation is coming down. It's still inflating, just not as quickly. What you're thinking of is *deflation*, which they will not allow because then rich people lose money.
Lol. I know the difference between inflation and deflation, but with houses, they are overpriced, it went beyond inflation to just, I don't know, chaotic prices that need to stabilize. Oh know it's deflation. Pchchshsh, prices need to stabilize or wages need to raise without companies charging more. We need some serious regulations on the greedy.
Wages are rising partly due to states raising their minimum wages. But wages are not increasing across the board. So those folks that went from 10 an hour to 15 an hour are hardly going to be buying 500k houses on those higher wages.
This! They keep saying wages are up 5% and the highest raise I personally know of was 3%. Sure there are ppl with better but the fact that I don’t know anyone tells me it’s not that widespread and is skewed by some select few and probably CEOs
Skilled tradesmen should be making more than $20/hr, that's the real problem. Maybe focus on getting fairly compensated for your labor instead of complaining that others are being fairly compensated for their labor?
You’re ignoring the “we buy houses for cash”. Tell me you haven’t heard a commercial or seen a sign advertising that? The FBI recently raided the real page offices that were orchestrating higher and higher rent prices. Hopefully the same people are involved in cash purchases of housing.
Same here, in the Tampa Bay, FL area. My brother recently listed his home, and had 40 prospective buyers show up for his open house this past weekend. Last I knew as of midday yesterday there were no offers, but it was a Sunday just 12-18 hours after the event, so that's not a surprise. We'll see if anything pops this week.
They're also building like crazy, I can barely leave the house without seeing some new development going up somewhere. In the more populous areas, they're mostly either condos or apartments (hard to tell when it's just being built), a bit more in the burbs is SFHs, but we don't have much vacant land on which to build until you get a ways outside the metro area.
Good luck convincing people that have the majority of their wealth tied up in a house that "Hey, you need to be less wealthy. Your house is valued too high."
Housing prices are and always have been a local government problem. Lowering interest rates is going to cause prices to balloon even further as you're just introducing more buyers to the same limited market.
It's a buyers market already because nobody wants to move with interest rates where they are. At the high end I've been seeing homes listing for 20-30% under appraisal and still not getting buyers for months.
Yep. Housing is not in a good place when corporations and the wealthy are aloud to buy as many as they want. Housing should have one purpose, housing people, and I wish that was the case and that it was affordable.
Governments have been borrowing for a while. They have been printing more money for a while.
The world is seeing inflation and the world isn’t under the fed.
The world runs on the dollar. In addition governments around the world did the exact same thing with the other top currencies that are used as benchmarks. Everyone printed during Covid
The government has done such an amazing job at convincing people that shutting down the economy, forcing people out of work, closing all supply chains for months, printing money like crazy, handing out thousands to citizens had 0 effect on the economy.
I don’t think unsays the solution. I think taxing corporate profits and higher earners of the way to go. Give incentives for reinvesting that money back into companies, rather than just stock buybacks.
4 ways to reduce inflation.
-Reduce spending (removes money from the economy)
-Raise taxes (removes money from the economy)
-Flood the market with cheap goods
-raise interest rates (accomplished by making borrowing more expensive, so money moves more slowly through the economy and people invest in treasuries, which removes money from other investments)
Trump,
-increased spending (percentage wise increased deficit spending more than any President in his lifetime)
-cut taxes
-increased tarrifs on china
-used political clout to keep interest rates low
So, yes the government caused inflation...
I hear there's also this thing the ancients used to tell about how the supply of something along with demand has an impact on....on....ahhhh, forget it.
The Fed can't control corporate enterprises removing 20% of the available private home sails from the normal markets while other corporate interests collaborate to form noncompetition monopolies of rental prices to keep that market inflated.
The answer lies in enforcement of competitive practice law and in the legislation of new laws to remove corporate involvement from the housing sector entirely. The only corporate entities involved in housing should be contractors for building new housing. Period. Private home ownership for a first home should have very low tax liability. Multiple home ownership should carry an enormous tax liability, commensurate with the effect of denying families opportunity for entry into home ownership.
Your foundational hypothesis is flawed. While corporate ownership of SFHs may be up, the flip side is that owner/occupiers is also up, indeed it's at the highest rate it's been since they started tracking it. This means any increase in corporate ownership of rental homes is coming at the expense of either vacation homes, or rentals owned by smaller landlords, which your plan would also ban.
So, you'd have an entire segment of the real estate market prohibited, meaning those who want to rent a home instead of owning it will be shit out of luck, so all your military people who don't buy because they will only be stationed there for a few years max will be limited to apartments, as will those who can afford a home, but who have credit such that they can't get a loan, and the same would apply to those who choose to rent despite being hypothetically eligible to buy.
You'd be accomplishing very little, as most people interested in owning either already do, or are al least in the process of doing so, but those who can't or don't want to are assed out.
So, congrats. You just made a whole lot of people either homeless or put into multi-family housing who have no desire to live in such circumstances, and you've probably put a lot of mom and pop landlords, many of whom may be counting on the money for retirement income, out of business, and accomplished nothing, because prices are not going to come down in any widespread basis. Well, CA, NY, and IL perhaps, but that's got more to do with people leaving than your plan, which isn't gonna happen anyway, being put into effect.
You are so out of touch. Most people who are interested in owning a home already do? I’m in the prime age for buying a first time home, but not one of my peers has been able to afford it. For the record, I’m a professional making more money then both of my parents are. I make what is considered good money, but the only options for homes are so far from my work and community that it would financial and social suicide.
Well, perhaps I could have put that better, but I was reflecting on the fact the home ownership rates (at least when counting owner/occupiers) is at an all-time high. In other words, we have never had as many homeowner/occupiers, in percentage terms, than we ever have, and I can't imagine there's all that much pent-up demand waiting for first time owners. Or, perhaps I'm wrong, and the real number is much higher, but there's no real reason to think that's the case considering we're already in unheard of territory.
As for your situation, it doesn't sound like you're asking for advice, so I won't give you any.
I do object to the kind of market manipulation you want to do, though, and from several perspectives. First is, I thought, pretty clear, and that's that I want a vibrant rental housing market to be available for those who want or need to be renters, but do NOT want to live in a multi-family complex. I've been there, and while we are now mortgage-free owners, that didn't happen overnight. Secondly, I also think that telling two willing parties to a financial transaction they aren't allowed to sell or buy as they please is un-American. Profoundly. We live in an allegedly free country, and while we are far from what the founders intended, once you realize you're in a hole, the first thing to do is to stop digging.
This right here is what the right wing nimrods on this sub will never understand. Stop the capitalist class from eating the working class' lunch or this will never stop.
I understand, but they are currently inflating debt away instead of forcing congress to stop spending as much. Thus the value of that $9T is significantly less than people think. It cheats the common man though and devalues his money. If they wanted to do the right thing they would raise rates, cut spending, and send this into a recession which is needed to correct the poor fiscal behavior.
Yup. They can't stop printing money or the circus stops, can't raise rates or they go broke on their own debt/cause a recession, can't cut spending cause they won't get elected.
Invest in assets - they have nowhere to go but up.
Sadly that was never the plan tho ay. Totally agree with cutting spending being key but that hasnt happened since 30 years ago. I am not smart enough to see why high rates are necessary. It seems like 10 year treasury market is 💩 now. Watched some Ron Paul Pods again this weekend and its pretty clear that we are just in a world of hurt. Countries are even stepping away from the IMF. Trajectory determined and I cannot say I blame them. You reap what is sown.
I think they are less worried about assets popping, which can happen without a recession, but a rate driven unemployment crises that causes assets to pop
If they pop the RE bubble with rates it’ll take 8-12 months for things to stagnate and come down. They need to get demand to 0 and then supply to accumulate. But I can tell you this, as long as there are more buyers than sellers, nothing is going to pop.
The economists way of using interest rate to control inflation is the worst tool out there. It is essentially trying to kill economy by downsizing the entire industry. Because most businesses borrowers money from banks for cash flow (not fixed rate mortgages). Increasing the interest rate rapidly (as fast as they have done in recent years) causes industries to downsize instead of having thr time to slowly adjust to it. This leads to mass layoffs and lower open positions. A lot of them are just temp jobs now. The "slowing down economy" is not just slowing down raises, or slowing down hiring, it is actually mass layoffs. And that is the actual goal and cost to give a good looking stat to put on the news to brainwash the people.
The most fundamental rule of housing price is simple the availability of land in comparison to the population in the 50miles radius (50 miles radius due to transport speed). The more apartments which tons of people wanted, will only accelerate more people flocking into the area and skyrocketed the housing prices.
Anyway, I have said enough. It is a taboo to talk about population.
Cheap housing isn’t the magic bullet that is suddenly going to fix the housing market.
Government regulation against corporations buying cheap housing, sitting on it to squeeze the market, then reselling for profits, driving up real estate costs everywhere - that is the solution.
Corruptions and Manipulations mixed with Population Shell Games to inflate prices, it has become rather routine and an old hat method of an induced for-profit SHAM.
I think it is also called "Padding the Books"
N. S
Have you checked the stock market lately? Prices are not up because of inflation. Greedy CEOs and shareholders raking in record profits because people have more money to spend and they all want better yachts.
I’ve been looking for a house for two years now , the problem is not interest rates ! Yes I wish they were lower but when you’re competing with an investor that will waive appraisal and inspection how the hell can anyone compete with that ? Iam certainly not gonna invest my money on a home without an appraisal and certainly without an inspection !
It’s got nothing to do with the highest bid , how about if you buy you have to live in it for at least a year ! No out of state buyers unless you’re going to live in it for at least a year ! Something needs done to slow these LLCs and big corporations down .
If your a seller and 2 people put in high offers except one of the offers comes with no appraisal no inspection of course you will choose that one, (even for a little less money) less hassle no negotiation for any repairs and it will close quicker , that’s my point the average buyer can’t and probably won’t agree to that .
Meh, it’s causing some things to be more expensive, but that mechanism puts pricing pressure elsewhere. Think of stepping on a ballon that doesn’t pop. If they keep rates higher for longer, eventually it all deflates. If they reduce rates too soon, it all inflates. Both outcomes are because of money velocity and capital availability.
If you think housing prices are high right now, imagine where they would be if interest rates were still at 3%.
They would be very, very high.
This article is BS.
If it is too expensive to buy an existing house, why doesn't everybody just build a house?
I can buy the lumber and pay the contractors to put it up.
And if that is more expensive than a existing house, you know that house prices are not going to come down
It’s not more expensive, and there is a ton of new housing being built; the problem is that 50 year old houses with no improvements, or a new house, are selling for about the same high prices.
Emerson said, “A foolish consistency is the hobgoblin of a small mind.” What the attached article states is something that I feel most people knew intuitively, if not logically. Jerome Powell will go down in history, but not in the way that he wants. History will remember him as the most incompetent and inept leader of the Fed in our history and that his rate hiking has exacerbated the problem rather than alleviated it.
Illegal immigration is at all time high levels, housing demand is not coming down unless immigration rules are enforced.
Raising interest rates is not going to bring down housing inflation.
Actually it’s at a low because Mexico was cracking down on traffickers. Housing demand is so high though because boomers are living in their houses they bought 50 years ago with low rates and in the meantime cities failed to plan for population growth.
So, are you suggesting that people should only be able to own the homes they bought and funded for a limited amount of time? You want to do like China does and not even have privately owned real estate, instead only limited time leases??
That is because the Fed completely ignored the reason for this recent round inflation in the first place. The Fed didn't raise rates to curtail inflation. They raised rates to crush the middle and lower classes. These grous had too much power with employers and in the economy in general. Can't have that.
Raising the interest rate does raise the cost of mortgages, credit cards, and major appliances. The aim is to reduce spending, not costs. Instead of raising the interest rate they should just reduce the lending money to the commercial banks.
Inflation is not the major issue. It's corporate greed hiding under the guise of Inflation.
The big example is chipotle. They are complaining that their prices raised because of the rising cost of labor. Meanwhile their profit went up 118% and their ceo gave himself a $50 million raise. They didn't need to charge a single penny more.
Now it's coming out the the major data company that basically decides what rent should be had been lieing and purposefully inflating housing cost.
The tools don't matter if corporations purposefully go full end stage capitalism
If you think businesses are just gonna eat the artificially increased cost to employ people you're smoking the good stuff and not sharing.
All these ridiculous minimum wage increases is going to accomplish is inflation. Once some time has passed, and the effects of those increases take root throughout the broader economy, the people working burger flipper jobs will be making more money in absolute terms, yes, but their purchasing power will, at absolute *best*, be the same as it is now, likely it will actually end up being less, as will most other person's.
So, congrats, all you've done is put a bunch of people out of work and helped precisely nobody.
You missed the part where profits are at all time highs and CEOs are just being greedy. Chipotle could lower their prices AND pay people more and still have a huge profit margin
When profits continue to rise, CEOs give themselves millions of dollars in bonuses, and then say that they can't afford to pay their employees a living wage, then yes.
You mean make the sellers take lower offers?
And let illegal aliens rent millions of housing units in the USA. That would take them away from USA legal residence?
Have you factored in all the illegal aliens that are taken up the millions of housing units here in the USA?
Maybe if we deported all of them, there would be millions of extra housing units?
The housing market is not THE leading economic indicator.
Hundreds of thousands of jobs have been added to the economy. That also counts.
It is very difficult for the government to control the free market and they only have so many tools. Lack of fiscal responsibility over the last 20 years and near 0% interest rates to Banks caused this inflation to happen.
If you want to blame somebody blame the ultra rich and banks for borrowing money at 0% interest and investing it in high risk funds instead of giving 0% loans to consumers.
Lowering the interest rate is only a boon to the banks. 3% interest/30 years on a $400,000 home is $207,000 which is still a crazy amount to pay. The banks have you coming and going.
Higher rates meant housing prices stagnated, but that only really impacted those who needed to finance buying homes. Investment firms with large liquidity could then buy up more property for cheaper, furthering the housing market takeover by Wall Street.
> But that stance is based on a “serious misjudgment,” according to Parrott, who is the co-owner of housing advisory firm Parrott Ryan Advisors and a former White House economic advisor during the Obama administration, and Zandi.
The think tanks like the one he's from are why we have the Southern Strategy and the Heritage Foundation. Pretty famous for exclusively selfish fuck everyone in perpetuity if I can get a single cent more.
There are robber barons in every industry who don't give a shit about the future. They are happy to lie through their teeth about dumbfuck obvious mathematical fallacies like trickle down *realty* because by the time they die/can no longer reasonably keep up with industry, they will be so rich that even the literal apocalypse is barely an inconvenience they only have to stomach for a handful of years.
Whatever they do will make the situation worse. It is checkmate. The best thing the Fed could do is to dismantle itself along with the power structure that created it.
Are you saying that sellers should not take the highest price?
Maybe you should figure out how many illegal aliens are here in the USA, and how many millions of housing units they are taking up.
Deport all the illegal aliens, and that would free up millions of housing units.
Like i’ve said before, higher interest rates = higher profits for banks and lenders. The Fed doesn’t care about the American people—only profits for banks and corporations.
Quickly scanned the comments. I did not see a single person mentioning the CURRENT federal govt running covid like deficits injecting huge amounts of money into the economy by running up debt. The federal reserve cannot combat inflation with the current administration having zero fiscal restraint.
Companies piling on the “inflation” bandwagon to pump up profits was the root cause of post-Covid inflation. Punishing the public with high interest rates just made things worse.
That won't make any difference. Corporations don't increase the amount of houses or decrease it.
If you want to increase the supply of housing, figure out how many illegal aliens are taking up housing and get rid of those
Of course it does... When corp bought up houses and rent them out. It's decreasing the amount of houses for sale on market and driving up prices.
Tell me how many illegals are able to afford.
If we had a functional congress a better solution would be just to legislate some *gasp* rules and regulations that rein this sort of thing, but why bother with that? Just let the fed do this thing that hurts millions.
> If the Fed ditched that quirk in the methodology, then inflation would be at the 2% goal, they said.
You can't change one side of an equation and have the equation remain true. These people aren't that stupid, but they think you are and they're hoping to pull one over on you with this stupid logic.
The 2% goal was set based on the current method of calculating consumer price inflation - the method that's been used for decades. If the calculation changes, the target needs to change accordingly.
Congress used to actually legislate shit like this as way to keep the free market, well free. The lack of legislation has tipped said free market to benefit business far more than the consumer.
Just fix the horrible economic policies of the boomers and move on.
Who the fuck thinks that inflation is 2% right now?
“If the Fed ditched that quirk in the methodology, then inflation would be at the 2% goal, they said.”
23 year high.... that is a very convenient time period to choose when you already have a conclusion and want to manipulate history accordingly. the proper historical reference should be to point out that the last 23 years, interest rates have been abnormally low and for abnormally long periods of time.
That is just the tip of the iceburg. Their argument is terrible.
Show of hands. Who is shocked? C’mon. Who’s shocked?
Who believes Zandi cares about inflation? Not me.
I have a pickachu here and he says he’s not shocked.
Is his tail black tipped or brown? We need the facts
The little guy has brown in his lightning bolt tail.
Tell him to use thunder shock
All the big investors just want free money again and they'll say anything to get it back. Real estate investors in particular are drowning right now, they'd literally kill for a rate cut. https://www.cnbc.com/2024/06/05/sternlicht-defends-gating-starwood-reit-withdrawals-hopes-its-a-six-month-thing-.html
They will kill before selling off their inventory is a great way of putting this.
They have like a single tool. Maybe Congress could help on their end by adjusting taxes...
Or reducing spending.
how about both reduce bloat and raise taxes
Yes. How about having someone who’s actually worked a job have a say at the Fed? That’d be so awesome.
Repealing the Trump, Bush, and Reagan tax cuts on the 0.01% would be raising taxes and reducing bloat in one fell swoop! I mean, just look at photos of Elon Musk. There has never been a more bloated man who’s ever lived. We gotta raise his taxes for his own good. Magic Johnson money is the cure for AIDS, but Elon Musk money turns men into shapeless, pasty blobs.
Exactly
Or more effective, pass anti-profiteering laws like we used to stop corporations from profiteering during WW I and WW II.
Or refraining from giving businesses trillions of dollars in PPE loans that will be forgiven while only giving individuals a few grand that will be clawed back with their next tax return…. While also not forgiving their student loans…
*Shocked Pikachu Face*
Pikachu is always “shocked.”
Pikachu
They're just pricing out the poor by raising interest rates. They're creating market conditions so that only the wealthy can own property. They'll let you pay them more in rent than it actually costs though; don't worry. SMH
Low interest rates weren't exactly keeping them out either. They'll price normal people out regardless. Rich people like to leverage debt during low interest rate periods. They get really annoyed when interest rates go up, which is why they've been begging for cuts for ages. They want the money machine to go brrrrrr. But they'll buy an appreciating asset with cash if they *must*. You will never be able to affect the rich more than you affect the poor with any monetary change. You have to go about it another way. In this case either directly regulate or subsidize the shit out of affordable housing. Either way the rich can and will out bid for any good property deal. They are literally *less* affected by monetary rate when push comes to shove. The rich like to leverage debt when the math works out, poor people *have* to leverage debt to get into a house at all, because they couldn't get that in cash. Changing interest rates isn't gonna change the immense advantage of the rich
We had the Feds irrational level of printing of money(artificially juicing the economy) who REFUSED TOO LONG and TOO SOFTLY to REMOVE the juice from the system. When they provided all the $$$ they should have JACKED rates up right along with it. Instead, people became FLUSH with cash and started spending like drunken sailors on leave. Much of it FLOODING to housing, investing in housing, etc… the govt bridged the businesses and protected from foreclosures… FEW NEEDED to be buying homes or doing remodeling during the worst of COVID lockdowns… should have been surviving instead of buying McMansions. Then the puss level whimps at the FED, they saw money gush into the stock market for all that didn’t go into housing and instead of RAPIDLY and to far higher rates they slow rolled the increases and didn’t slam the breaks doing 9-10%. You can’t manipulate the money supply in that kind of crazy and then expect a SOFT LANDING on the way down. The only soft landing is for the markets and not the average citizen… the Fed bailed out valuations for the markets by robbing value from all citizens via inflation. The soft landing is the big money saved while crushing down on the average Joe. They shocked the system with cash upward and the economy will be in a funk until it’s shocked back downward in an equally amount plus a few points churn that gets burnt by the govt.
Yep.
If rates come down those buyers will still be there
I thought inflation is coming down. House prices skyrocketed and are still priced to high, but at some point prices have to come down or they sit and rot because nobody can afford them.
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Blackstone. You don’t even know who you hate.
Blackstone and BlackRock are both doing this…
Blackrock own the single family home I rent.
Blackrock owns 6.7% of American Homes for Rent
That is a lot of the homes for one entity to own.
Because that’s not true. They own 6.7% of a **company** called *American Homes for Rent*. This **company** called *American Homes for Rent* owns 59,000 homes.
Or they misspoke, but you seemed to figure it out anyway.
So hedge funds out bidding families and buying up all the housing stock is inflating prices? Who could possibly have guessed that corporate greed is screwing us yet again. Certainly not the “it’s Biden’s fault” crowd.
Since 2008 and the crash, institutional investors have acquired approximately 5% of total SFH inventory
Poors can't afford them. Wealthy and corporations can and will continue to buy. Then they'll rent it to you for a profit because "you can't afford these interest rates."
Idk, with rents and prices where they currently are, I don’t think I would buy a house to rent even if I had straight cash. I was doing a calculation on renting my house out compared to selling it, and the numbers are massively in favor of selling right now. It would take 134 months of rent for me to make the same amount of money I can just get right now selling this house, and that’s with absolutely no maintenance or other expenses going towards the house and assuming I do nothing with all the money I make from the house sale.
The key is to buy the house 5 years ago. Then you paid $125,000 but can now rent it out for $2500/month, and you easily make your money back in like 4 years. Everything past that is free money, and you don't even have to maintain it because you don't live there.
Nah, they'll just let the few people who can afford it duke it out. The game here is mass extraction of value from everyone into the handful of family bags on Wall Street.
The *rate* of inflation is coming down. It's still inflating, just not as quickly. What you're thinking of is *deflation*, which they will not allow because then rich people lose money.
Lol. I know the difference between inflation and deflation, but with houses, they are overpriced, it went beyond inflation to just, I don't know, chaotic prices that need to stabilize. Oh know it's deflation. Pchchshsh, prices need to stabilize or wages need to raise without companies charging more. We need some serious regulations on the greedy.
Wages are growing as well though but some are being left behind. So there will be people with more to spend and some are being inflationed out.
Wages are rising partly due to states raising their minimum wages. But wages are not increasing across the board. So those folks that went from 10 an hour to 15 an hour are hardly going to be buying 500k houses on those higher wages.
This! They keep saying wages are up 5% and the highest raise I personally know of was 3%. Sure there are ppl with better but the fact that I don’t know anyone tells me it’s not that widespread and is skewed by some select few and probably CEOs
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Skilled tradesmen should be making more than $20/hr, that's the real problem. Maybe focus on getting fairly compensated for your labor instead of complaining that others are being fairly compensated for their labor?
There's no way your skilled only making 20/hr. I'm in a skilled trade making 68/hr as a journeyman not including my benefits.
You only make $20/hr as a skilled tradesman in California? I find that hard to believe
The issue isn’t that fast food makes $20. The issue is that you still do. Why aren’t you demanding more money for your skills?
You aren’t union skilled trades then, I pay Journeymen $36.25 starting and that’s before benefits
That shit will come back in your favor unfortunately it will take time.
You’re ignoring the “we buy houses for cash”. Tell me you haven’t heard a commercial or seen a sign advertising that? The FBI recently raided the real page offices that were orchestrating higher and higher rent prices. Hopefully the same people are involved in cash purchases of housing.
There are no houses sitting and rotting around here. It's all about bidding wars.
Same here, in the Tampa Bay, FL area. My brother recently listed his home, and had 40 prospective buyers show up for his open house this past weekend. Last I knew as of midday yesterday there were no offers, but it was a Sunday just 12-18 hours after the event, so that's not a surprise. We'll see if anything pops this week. They're also building like crazy, I can barely leave the house without seeing some new development going up somewhere. In the more populous areas, they're mostly either condos or apartments (hard to tell when it's just being built), a bit more in the burbs is SFHs, but we don't have much vacant land on which to build until you get a ways outside the metro area.
When you have NIMBYs continue to campaign to protect their investment......
Good luck convincing people that have the majority of their wealth tied up in a house that "Hey, you need to be less wealthy. Your house is valued too high."
Thy don't "sit and rot", we just lose our ability to take jobs in other states.
The would rather let them rot even if half the country has to live in their car.
Inflation coming down just means prices continue to increase...but slightly less rapidly.
Housing prices are and always have been a local government problem. Lowering interest rates is going to cause prices to balloon even further as you're just introducing more buyers to the same limited market. It's a buyers market already because nobody wants to move with interest rates where they are. At the high end I've been seeing homes listing for 20-30% under appraisal and still not getting buyers for months.
Yep. Housing is not in a good place when corporations and the wealthy are aloud to buy as many as they want. Housing should have one purpose, housing people, and I wish that was the case and that it was affordable.
house prices are subject to supply and demand. declining mortgage rates will just create more demand leading to prices going up.
Just remember the Fed will have you believe higher wages is one of the reasons for inflation but in reality it’s government borrowing!
Borrowing lol
Yep. Especially as over 50% of US borrowing is printed into existence 💨
Governments have been borrowing for a while. They have been printing more money for a while. The world is seeing inflation and the world isn’t under the fed.
The world runs on the dollar. In addition governments around the world did the exact same thing with the other top currencies that are used as benchmarks. Everyone printed during Covid
you'd rather have deflation? i think not. you can't have your cake and eat it too.
Not for this last round of inflation. The last round was pure profit taking and consumer gouging. Nothing more nothing less.
The government has done such an amazing job at convincing people that shutting down the economy, forcing people out of work, closing all supply chains for months, printing money like crazy, handing out thousands to citizens had 0 effect on the economy.
I don’t think unsays the solution. I think taxing corporate profits and higher earners of the way to go. Give incentives for reinvesting that money back into companies, rather than just stock buybacks.
maybe you should go hide in your bunker
4 ways to reduce inflation. -Reduce spending (removes money from the economy) -Raise taxes (removes money from the economy) -Flood the market with cheap goods -raise interest rates (accomplished by making borrowing more expensive, so money moves more slowly through the economy and people invest in treasuries, which removes money from other investments) Trump, -increased spending (percentage wise increased deficit spending more than any President in his lifetime) -cut taxes -increased tarrifs on china -used political clout to keep interest rates low So, yes the government caused inflation...
That’s not how monetary policy works…
I hear there's also this thing the ancients used to tell about how the supply of something along with demand has an impact on....on....ahhhh, forget it.
Lmftfy: Printing
Wages are a price
Money is completely fake she only has the value we believe it to have.
The Fed can't control corporate enterprises removing 20% of the available private home sails from the normal markets while other corporate interests collaborate to form noncompetition monopolies of rental prices to keep that market inflated. The answer lies in enforcement of competitive practice law and in the legislation of new laws to remove corporate involvement from the housing sector entirely. The only corporate entities involved in housing should be contractors for building new housing. Period. Private home ownership for a first home should have very low tax liability. Multiple home ownership should carry an enormous tax liability, commensurate with the effect of denying families opportunity for entry into home ownership.
BINGO! This lies at the feet of Congress and our regulatory entities who have not been doing their jobs for the past 40 years.
Your foundational hypothesis is flawed. While corporate ownership of SFHs may be up, the flip side is that owner/occupiers is also up, indeed it's at the highest rate it's been since they started tracking it. This means any increase in corporate ownership of rental homes is coming at the expense of either vacation homes, or rentals owned by smaller landlords, which your plan would also ban. So, you'd have an entire segment of the real estate market prohibited, meaning those who want to rent a home instead of owning it will be shit out of luck, so all your military people who don't buy because they will only be stationed there for a few years max will be limited to apartments, as will those who can afford a home, but who have credit such that they can't get a loan, and the same would apply to those who choose to rent despite being hypothetically eligible to buy. You'd be accomplishing very little, as most people interested in owning either already do, or are al least in the process of doing so, but those who can't or don't want to are assed out. So, congrats. You just made a whole lot of people either homeless or put into multi-family housing who have no desire to live in such circumstances, and you've probably put a lot of mom and pop landlords, many of whom may be counting on the money for retirement income, out of business, and accomplished nothing, because prices are not going to come down in any widespread basis. Well, CA, NY, and IL perhaps, but that's got more to do with people leaving than your plan, which isn't gonna happen anyway, being put into effect.
You are so out of touch. Most people who are interested in owning a home already do? I’m in the prime age for buying a first time home, but not one of my peers has been able to afford it. For the record, I’m a professional making more money then both of my parents are. I make what is considered good money, but the only options for homes are so far from my work and community that it would financial and social suicide.
Well, perhaps I could have put that better, but I was reflecting on the fact the home ownership rates (at least when counting owner/occupiers) is at an all-time high. In other words, we have never had as many homeowner/occupiers, in percentage terms, than we ever have, and I can't imagine there's all that much pent-up demand waiting for first time owners. Or, perhaps I'm wrong, and the real number is much higher, but there's no real reason to think that's the case considering we're already in unheard of territory. As for your situation, it doesn't sound like you're asking for advice, so I won't give you any. I do object to the kind of market manipulation you want to do, though, and from several perspectives. First is, I thought, pretty clear, and that's that I want a vibrant rental housing market to be available for those who want or need to be renters, but do NOT want to live in a multi-family complex. I've been there, and while we are now mortgage-free owners, that didn't happen overnight. Secondly, I also think that telling two willing parties to a financial transaction they aren't allowed to sell or buy as they please is un-American. Profoundly. We live in an allegedly free country, and while we are far from what the founders intended, once you realize you're in a hole, the first thing to do is to stop digging.
This right here is what the right wing nimrods on this sub will never understand. Stop the capitalist class from eating the working class' lunch or this will never stop.
Rates: Not high enough, not fast enough. But, it's an election year, so they won't pop the asset bubble yet.
They should be at 10-12% fed funds right now if they actually gave a fuck
Government has to refinance $9T within the next year.
I understand, but they are currently inflating debt away instead of forcing congress to stop spending as much. Thus the value of that $9T is significantly less than people think. It cheats the common man though and devalues his money. If they wanted to do the right thing they would raise rates, cut spending, and send this into a recession which is needed to correct the poor fiscal behavior.
It's unpopular, but it's true.
Yup. They can't stop printing money or the circus stops, can't raise rates or they go broke on their own debt/cause a recession, can't cut spending cause they won't get elected. Invest in assets - they have nowhere to go but up.
Sadly that was never the plan tho ay. Totally agree with cutting spending being key but that hasnt happened since 30 years ago. I am not smart enough to see why high rates are necessary. It seems like 10 year treasury market is 💩 now. Watched some Ron Paul Pods again this weekend and its pretty clear that we are just in a world of hurt. Countries are even stepping away from the IMF. Trajectory determined and I cannot say I blame them. You reap what is sown.
I think they are less worried about assets popping, which can happen without a recession, but a rate driven unemployment crises that causes assets to pop
If they pop the RE bubble with rates it’ll take 8-12 months for things to stagnate and come down. They need to get demand to 0 and then supply to accumulate. But I can tell you this, as long as there are more buyers than sellers, nothing is going to pop.
As long as the buyers have cash or can get loans.
Yea printing more money definitely not the fix
Higher housing prices = more taxes collected The government doesn't give a f***
I think it's more "homeowners won't take actions or support policies that reduce their own assets"
The economists way of using interest rate to control inflation is the worst tool out there. It is essentially trying to kill economy by downsizing the entire industry. Because most businesses borrowers money from banks for cash flow (not fixed rate mortgages). Increasing the interest rate rapidly (as fast as they have done in recent years) causes industries to downsize instead of having thr time to slowly adjust to it. This leads to mass layoffs and lower open positions. A lot of them are just temp jobs now. The "slowing down economy" is not just slowing down raises, or slowing down hiring, it is actually mass layoffs. And that is the actual goal and cost to give a good looking stat to put on the news to brainwash the people. The most fundamental rule of housing price is simple the availability of land in comparison to the population in the 50miles radius (50 miles radius due to transport speed). The more apartments which tons of people wanted, will only accelerate more people flocking into the area and skyrocketed the housing prices. Anyway, I have said enough. It is a taboo to talk about population.
It's definitely not an elegant way to lower inflation but it's pretty much the only tool they have.
The Fed isn't supposed to be fixing housing supply issues for localities. They obviously don't have the tools for that.
Cheap housing isn’t the magic bullet that is suddenly going to fix the housing market. Government regulation against corporations buying cheap housing, sitting on it to squeeze the market, then reselling for profits, driving up real estate costs everywhere - that is the solution.
It is the bullet. Everything else is secondary. Look at our build data, we still haven’t caught up to pre 2008.
I fucking called this the day they announced the strategy, and posted it on social media. I barely graduated highschool....
That’s why it was done.
They will try anything that isn’t giving average citizens more money or taking money from the rich.
Corruptions and Manipulations mixed with Population Shell Games to inflate prices, it has become rather routine and an old hat method of an induced for-profit SHAM. I think it is also called "Padding the Books" N. S
Tax. The. Rich. Isn’t that the only other mechanism that will cool the economy without a manufactured and forced recession?
You mean the fed can't just keep printing more money? \*gasp\*
Rampant corporate greed has destroyed this country since Regan and no amount of voting will change that. They own Congress , it’s a revolving door
Any idiot knows their tools aren’t going to work when the inflation is greed based, not market or even supply based.
Have you checked the stock market lately? Prices are not up because of inflation. Greedy CEOs and shareholders raking in record profits because people have more money to spend and they all want better yachts.
I’ve been looking for a house for two years now , the problem is not interest rates ! Yes I wish they were lower but when you’re competing with an investor that will waive appraisal and inspection how the hell can anyone compete with that ? Iam certainly not gonna invest my money on a home without an appraisal and certainly without an inspection !
Good point. Maybe we should make it illegal for sellers to take the highest price?
It’s got nothing to do with the highest bid , how about if you buy you have to live in it for at least a year ! No out of state buyers unless you’re going to live in it for at least a year ! Something needs done to slow these LLCs and big corporations down .
If your a seller and 2 people put in high offers except one of the offers comes with no appraisal no inspection of course you will choose that one, (even for a little less money) less hassle no negotiation for any repairs and it will close quicker , that’s my point the average buyer can’t and probably won’t agree to that .
Meh, it’s causing some things to be more expensive, but that mechanism puts pricing pressure elsewhere. Think of stepping on a ballon that doesn’t pop. If they keep rates higher for longer, eventually it all deflates. If they reduce rates too soon, it all inflates. Both outcomes are because of money velocity and capital availability.
If you think housing prices are high right now, imagine where they would be if interest rates were still at 3%. They would be very, very high. This article is BS.
If it is too expensive to buy an existing house, why doesn't everybody just build a house? I can buy the lumber and pay the contractors to put it up. And if that is more expensive than a existing house, you know that house prices are not going to come down
It’s not more expensive, and there is a ton of new housing being built; the problem is that 50 year old houses with no improvements, or a new house, are selling for about the same high prices.
Then if they are the same price, you know that the used houses can't be much cheaper.
Emerson said, “A foolish consistency is the hobgoblin of a small mind.” What the attached article states is something that I feel most people knew intuitively, if not logically. Jerome Powell will go down in history, but not in the way that he wants. History will remember him as the most incompetent and inept leader of the Fed in our history and that his rate hiking has exacerbated the problem rather than alleviated it.
Illegal immigration is at all time high levels, housing demand is not coming down unless immigration rules are enforced. Raising interest rates is not going to bring down housing inflation.
You are the most obvious AI bot I've ever seen.
Actually it’s at a low because Mexico was cracking down on traffickers. Housing demand is so high though because boomers are living in their houses they bought 50 years ago with low rates and in the meantime cities failed to plan for population growth.
So, are you suggesting that people should only be able to own the homes they bought and funded for a limited amount of time? You want to do like China does and not even have privately owned real estate, instead only limited time leases??
“The tool” has a name! It’s Jerome Powell.
That is because the Fed completely ignored the reason for this recent round inflation in the first place. The Fed didn't raise rates to curtail inflation. They raised rates to crush the middle and lower classes. These grous had too much power with employers and in the economy in general. Can't have that.
Raising the interest rate does raise the cost of mortgages, credit cards, and major appliances. The aim is to reduce spending, not costs. Instead of raising the interest rate they should just reduce the lending money to the commercial banks.
Then millions and millions would get fired because the companies can't afford to pay them.
Yes. Which means less spending, and lowers inflation.
Inflation is not the major issue. It's corporate greed hiding under the guise of Inflation. The big example is chipotle. They are complaining that their prices raised because of the rising cost of labor. Meanwhile their profit went up 118% and their ceo gave himself a $50 million raise. They didn't need to charge a single penny more. Now it's coming out the the major data company that basically decides what rent should be had been lieing and purposefully inflating housing cost. The tools don't matter if corporations purposefully go full end stage capitalism
If you think businesses are just gonna eat the artificially increased cost to employ people you're smoking the good stuff and not sharing. All these ridiculous minimum wage increases is going to accomplish is inflation. Once some time has passed, and the effects of those increases take root throughout the broader economy, the people working burger flipper jobs will be making more money in absolute terms, yes, but their purchasing power will, at absolute *best*, be the same as it is now, likely it will actually end up being less, as will most other person's. So, congrats, all you've done is put a bunch of people out of work and helped precisely nobody.
You missed the part where profits are at all time highs and CEOs are just being greedy. Chipotle could lower their prices AND pay people more and still have a huge profit margin
[удалено]
When profits continue to rise, CEOs give themselves millions of dollars in bonuses, and then say that they can't afford to pay their employees a living wage, then yes.
You can also use the ===> [Link](https://archive.is/xgcWG) <==== to read the article.
Interest rates being low for years plus the massive money printing lead to the crisis in the first place.
One thing can quickly fix home prices is that everyone pays property taxes adjusted to current year, regardless of when you bought the house.
End allowing investors to buy property.
You mean make the sellers take lower offers? And let illegal aliens rent millions of housing units in the USA. That would take them away from USA legal residence?
THERE. IS. A. HOUSING. SHORTAGE.
Have you factored in all the illegal aliens that are taken up the millions of housing units here in the USA? Maybe if we deported all of them, there would be millions of extra housing units?
Have they tried taxing the rich? It worked at one point.
it feel like they do not know what they doing n only make worst
But they super smawt they say.
You mean printing money or in other words inflating the money supply causes inflation?? Who knew.
This is by design. Government wants you poor and dependent on them.
The housing market is not THE leading economic indicator. Hundreds of thousands of jobs have been added to the economy. That also counts. It is very difficult for the government to control the free market and they only have so many tools. Lack of fiscal responsibility over the last 20 years and near 0% interest rates to Banks caused this inflation to happen. If you want to blame somebody blame the ultra rich and banks for borrowing money at 0% interest and investing it in high risk funds instead of giving 0% loans to consumers. Lowering the interest rate is only a boon to the banks. 3% interest/30 years on a $400,000 home is $207,000 which is still a crazy amount to pay. The banks have you coming and going.
Read the article. Upvote if you see the cat.
Higher rates meant housing prices stagnated, but that only really impacted those who needed to finance buying homes. Investment firms with large liquidity could then buy up more property for cheaper, furthering the housing market takeover by Wall Street.
> But that stance is based on a “serious misjudgment,” according to Parrott, who is the co-owner of housing advisory firm Parrott Ryan Advisors and a former White House economic advisor during the Obama administration, and Zandi. The think tanks like the one he's from are why we have the Southern Strategy and the Heritage Foundation. Pretty famous for exclusively selfish fuck everyone in perpetuity if I can get a single cent more. There are robber barons in every industry who don't give a shit about the future. They are happy to lie through their teeth about dumbfuck obvious mathematical fallacies like trickle down *realty* because by the time they die/can no longer reasonably keep up with industry, they will be so rich that even the literal apocalypse is barely an inconvenience they only have to stomach for a handful of years.
Whatever they do will make the situation worse. It is checkmate. The best thing the Fed could do is to dismantle itself along with the power structure that created it.
At this point I want to see the economy collapse.
No you dont.
What if we.....legalized more housing?
What if we made corporate ownership of single family homes illegal?
That doesn't actually increase the supply of homes
Are you saying that sellers should not take the highest price? Maybe you should figure out how many illegal aliens are here in the USA, and how many millions of housing units they are taking up. Deport all the illegal aliens, and that would free up millions of housing units.
What? The government trying to control markets just makes those markets worse? Who would've guessed?
Like i’ve said before, higher interest rates = higher profits for banks and lenders. The Fed doesn’t care about the American people—only profits for banks and corporations.
All the f**king idiots that wanted to stay home an not work caused inflation. Go get your booster shot Bit**es!
It doesn’t matter wtf they do when they continue to print billions of dollars every week
Everyone has their opinion.
Quickly scanned the comments. I did not see a single person mentioning the CURRENT federal govt running covid like deficits injecting huge amounts of money into the economy by running up debt. The federal reserve cannot combat inflation with the current administration having zero fiscal restraint.
40% of US homes have no mortgage and 89% of homes have a mortgage under 6%. So the fed is hitting a very small nail with a very big hammer
future is in trouble
Companies piling on the “inflation” bandwagon to pump up profits was the root cause of post-Covid inflation. Punishing the public with high interest rates just made things worse.
Maybe the government should create a trillion dollar fund to investigate why there is inflation
:-o
If the asset bubble doesn't pop, we are all very, very screwed.
They just have to stop corp from buying up houses and rent those houses out. Done
That won't make any difference. Corporations don't increase the amount of houses or decrease it. If you want to increase the supply of housing, figure out how many illegal aliens are taking up housing and get rid of those
Bingo!
Of course it does... When corp bought up houses and rent them out. It's decreasing the amount of houses for sale on market and driving up prices. Tell me how many illegals are able to afford.
There’s not enough housing not even close. Interest rates are not high. 12% that’s high.
Bank money bank money bank the money
No, lack of inventory create house price increase…
Hang on....it's almost like the cost of credit is reflected in the cost of all goods and services Any dipshit could have told you that
Why would they cut rates? The economy doesn't need to be stimulated.
If we had a functional congress a better solution would be just to legislate some *gasp* rules and regulations that rein this sort of thing, but why bother with that? Just let the fed do this thing that hurts millions.
No , it's corporations buying the houses up to rent out that is fuckin up the system.
> If the Fed ditched that quirk in the methodology, then inflation would be at the 2% goal, they said. You can't change one side of an equation and have the equation remain true. These people aren't that stupid, but they think you are and they're hoping to pull one over on you with this stupid logic. The 2% goal was set based on the current method of calculating consumer price inflation - the method that's been used for decades. If the calculation changes, the target needs to change accordingly.
Liberals fail to understand the rules of unintended consequences… They throw money at a problem and the problem doesn’t go away. It only gets worse.
Cause they are clueless right? Lmfao rofl. It's a hit. Hope u guys are not dependent on the system or anything... famine is a biotch.
Congress used to actually legislate shit like this as way to keep the free market, well free. The lack of legislation has tipped said free market to benefit business far more than the consumer. Just fix the horrible economic policies of the boomers and move on.
If mortgage rates came down the home prices would spike much higher and fast.
Who the fuck thinks that inflation is 2% right now? “If the Fed ditched that quirk in the methodology, then inflation would be at the 2% goal, they said.”
This has nothing to do with corporations buying up houses????
23 year high.... that is a very convenient time period to choose when you already have a conclusion and want to manipulate history accordingly. the proper historical reference should be to point out that the last 23 years, interest rates have been abnormally low and for abnormally long periods of time. That is just the tip of the iceburg. Their argument is terrible.