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The Government Creates Another Housing Bubble

By Patrick following x   2018 May 31, 10:07pm 680 views   6 comments   watch   nsfw   quote     share    


https://www.wsj.com/amp/articles/the-government-creates-another-housing-bubble-1527807765

The root of the problem is declining underwriting standards. In April Freddie Mac announced an expansion of its 3% down-payment mortgage, the better to compete with the Federal Housing Administration and Fannie Mae . Such moves propel home prices upward. Because government agencies guarantee about 80% of all home-purchase mortgages, their underwriting standards guide the market.

Making lending even more dangerous, CNBC recently reported that “credit scores may go up” because new regulatory guidance allows delinquent taxes to be excluded when calculating credit scores. These are only some of the measures that “expand the credit box” and qualify ever-shakier borrowers for mortgages.
1   anonymous   ignore (null)   2019 Mar 4, 8:04am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Freddie Mac: February forecast hints at a mortgage market slowdown - Freddie predicts lower mortgage rates will decelerate growth of total home sales

This year’s mortgage market is projected to grow modestly, as both mortgage and interest rates slide further, according to Freddie Mac’s February Forecast.

According to the government sponsored enterprise, U.S. GDP growth will fall to 2.5% in 2019, edging down to 1.8% come 2020. However, Freddie predicts the labor market will remain strong despite these economic headwinds.

Employment, which has been sitting at record highs, is forecasted to retreat slightly to 3.6% in 2019 before returning to a more sustainable long-term rate of 3.9% by 2020, according to the company.

Notably, the 30-year fixed-rate mortgage rate is expected to average 4.6% this year, eventually rising to 4.9% in 2020.

“We expect single-family mortgage originations to increase 2.6% to $1.69 trillion in 2019 and remain around that level in 2020,” Freddie Mac Chief Economist Sam Khater said. “With mortgage rates easing up since the end of 2018, we revised up our forecast of the refinance share of originations to 27% and 24% in 2019 and 2020, respectively.”

Freddie also notes housing starts will fall well below long-run demand, increasing to 1.29 million units this year and 1.36 million units next year.

That being said, lower mortgage rates are expected to decelerate growth of total home sales, as they inch forward to 6.10 million in 2019 and to 6.12 million in 2020, according to Freddie.

For the remainder of 2019, single-family mortgage originations are expected to move forward 2.1% equating $1.68 trillion. Freddie says this will also be the similar rate in the following year.

Lastly, the GSE highlights that in the fourth quarter of 2018, its house price index fell 0.7%. However, Freddie expects home prices will increase 4.1% and 2.8% in 2019 and 2020, respectively.

https://www.housingwire.com/articles/48331-freddie-mac-february-forecast-hints-at-a-mortgage-market-slowdown
3   HeadSet   ignore (1)   2019 Mar 6, 1:06pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Other ways besides the gun shots to keep property value from inflating:

Put up a "Large Mouth Bass" mailbox
Put up a chicken coop
Porch couch with keg-erator
Park a car in front with a highly amped stereo blasting acid rap, heavy on the bass
Trompe l'oeil the closed garage door to look like an immigrant family living inside
4   Hugolas_Madurez   ignore (4)   2019 Mar 6, 1:10pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

HeadSet says
Other ways besides the gun shots to keep property value from inflating:

Put up a "Large Mouth Bass" mailbox
Put up a chicken coop
Porch couch with keg-erator
Park a car in front with a highly amped stereo blasting acid rap, heavy on the bass
Trompe l'oeil the closed garage door to look like an immigrant family living inside


Brown lawn with a 1983 Camaro on cinderblocks right in the middle of it.
5   AD   ignore (0)   2019 Mar 6, 1:20pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Home Price to Income ratio:

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

Hugolas_Madurez says

Brown lawn with a 1983 Camaro on cinderblocks right in the middle of it.


Have more than 2 families living in a home. Grow chickens and corn in the front. Play loud Mariachi or Tejano music from the home. Fly a flag of a Central American country in front.
6   HeadSet   ignore (1)   2019 Mar 6, 1:23pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Brown lawn with a 1983 Camaro on cinderblocks right in the middle of it.

Is that one style of the "granny flats" I have been hearing about?

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