Definitely healthy to have more sellers. When comparing the gap between new listings and actual sales, it's wider this year in my local market. But not really higher than the pre-2020 norm.
Always appreciate you showing data and going into explanation. Two higher level questions: 1) Logan Mohastami at HousingWire believes the mortgage spread is likely to shrink 27 to 41 basis points leading mortgage rates down also, despite likely inflationary promises by new administration. Spent last few hours reading trying to wrap my head around factors driving mortgage spread. 2) In areas with constrained housing supply, thinking Northeast, Midwest and some others, I simply do not see anything that can alter the chilling trifecta of high prices, low inventory and low affordability. Sometime ago you discussed that baby boomers will likely not sell their homes until their health deteriorates sometime in their 80s. Hope I’m summarizing that correctly. Anyway would love to hear your thoughts on mortgage spreads and baby boomer downsizing.
Logan is a better expert on mortgage spreads than I am, but one way to think of spreads is a risk premium that mortgage investors demand. When the 10year yield is rising rapidly, the spread increases making a double whammy for rates. When the 10 year is more stable, that gives room for the spreads to ease down, so the mortgage rate can ease down even if the 10year stays elevated. - Mike
Still need more inventory just to get back to a more normal pre 2019. These last 5 years really show why you absolutely must own a home or else you will get left behind in high inflation environments. It’s nuts how many people don’t believe in home ownership because they think it is too risky. The reality is it is too risky not to own a home.
We actually were trending under 4 million months back and have been at depressed levels for the past 2 years so it’s not anything new for the market as of now.
Last time we were under 4m we also had an existing abundance of supply. Apples and oranges... we are still way low on inventory almost across the board
Most sellers are also buyers. People can’t afford to transact in this market so everyone sits in a house they want to sell but won’t sell it. The only houses going on the market are deaths, divorces, and flips
Mike - You keep saying as rates climb, inventory climbs. I am not seeing this and it makes no sense to me. Higher rates, fewer buyers, and higher rates, those sitting on low mortgage rates are less likely to list because they don't want to trade in their low mortgage rates to buy a house at 7% mortgage. I'm not getting this, Mike.
2020 crash is going to happen from unemployment 2021 from mortgage loan forbearance 2022 from rates and inventory increasing 2023 high rates and prices 2024 mass layoffs and another Great Depression Now it's definitely going to happen in 2025 but if it doesn't happen then wait until 2026 but if not then wait for 2027, etc.
Definitely healthy to have more sellers. When comparing the gap between new listings and actual sales, it's wider this year in my local market. But not really higher than the pre-2020 norm.
Always appreciate you showing data and going into explanation. Two higher level questions:
1) Logan Mohastami at HousingWire believes the mortgage spread is likely to shrink 27 to 41 basis points leading mortgage rates down also, despite likely inflationary promises by new administration. Spent last few hours reading trying to wrap my head around factors driving mortgage spread.
2) In areas with constrained housing supply, thinking Northeast, Midwest and some others, I simply do not see anything that can alter the chilling trifecta of high prices, low inventory and low affordability.
Sometime ago you discussed that baby boomers will likely not sell their homes until their health deteriorates sometime in their 80s. Hope I’m summarizing that correctly.
Anyway would love to hear your thoughts on mortgage spreads and baby boomer downsizing.
Logan is a better expert on mortgage spreads than I am, but one way to think of spreads is a risk premium that mortgage investors demand. When the 10year yield is rising rapidly, the spread increases making a double whammy for rates. When the 10 year is more stable, that gives room for the spreads to ease down, so the mortgage rate can ease down even if the 10year stays elevated. - Mike
Still need more inventory just to get back to a more normal pre 2019.
These last 5 years really show why you absolutely must own a home or else you will get left behind in high inflation environments.
It’s nuts how many people don’t believe in home ownership because they think it is too risky. The reality is it is too risky not to own a home.
Volumes below 4m units per year. Last time volumes collapsed like this we had a housing price collapse.
What year/s was that?
This time is different bro. Just listen to clown hackers alt accounts.
We actually were trending under 4 million months back and have been at depressed levels for the past 2 years so it’s not anything new for the market as of now.
2025….
Last time we were under 4m we also had an existing abundance of supply. Apples and oranges... we are still way low on inventory almost across the board
Which financial instruments I can use as an private investor to shorten the housing market?
It was glad to see a comparison to the days in 2007/2008.
It means if houses are not affordable at all, selling will be the best.
Most sellers are also buyers. People can’t afford to transact in this market so everyone sits in a house they want to sell but won’t sell it. The only houses going on the market are deaths, divorces, and flips
The price is too high. That’s the problem.
Thanks Mike! Great stuff as always
Sooooo…. Didn’t this guy refuse to point it out when it was becoming more affordable to buy a home a couple of months ago?
He just shows you the data. Do what you wish with it.
99% of those youtube gurus are full of 💩
He shows data and also inserts narrative, and he is inconsistent in how he lets data impact the narrative that he delivers
Affordability was way up. year over year in September. Crickets about this from him. Then it goes up for a couple of months and talks about that
its BEEN unaffordable lol
Mike - You keep saying as rates climb, inventory climbs. I am not seeing this and it makes no sense to me. Higher rates, fewer buyers, and higher rates, those sitting on low mortgage rates are less likely to list because they don't want to trade in their low mortgage rates to buy a house at 7% mortgage. I'm not getting this, Mike.
Dominos starting to fall….
2020 crash is going to happen from unemployment
2021 from mortgage loan forbearance
2022 from rates and inventory increasing
2023 high rates and prices
2024 mass layoffs and another Great Depression
Now it's definitely going to happen in 2025 but if it doesn't happen then wait until 2026 but if not then wait for 2027, etc.