The podcast episode features a discussion about the housing market and its surprising resilience despite initial concerns about a potential crash due to rising mortgage rates. The conversation is led by hosts Tracy Alloway and Joe Weisenthal, who speak with guest Jim Egan, the U.S. housing strategist at Morgan Stanley. The housing market experienced a historic run-up in benchmark interest rates, resulting in higher mortgage rates. Many expected this to lead to a housing market crash, but the actual outcome was quite different. Instead, the housing market experienced only a slight dip in prices and quickly rebounded, leading to the shortest housing bear market ever. The main factor influencing the housing market's stability was the limited supply of homes for sale. Homeowners, who had taken advantage of low mortgage rates, were not willing to sell their properties at lower prices. As a result, even though affordability decreased, the lack of available homes for sale prevented significant price declines. The conversation also delves into factors such as household formation, new home construction, and demand for shelter. The guest, Jim Egan, explains the four pillars that impact the housing market: demand, supply, affordability, and mortgage credit availability. He also shares his forecast for house prices, which had been an out-of-consensus call but has now become more aligned with market expectations. The biggest risk factor to the housing market's outlook includes a potential improvement in affordability that may lead to higher demand and price increases. On the downside, a harder landing in the labor market could create issues for both demand and supply, leading to price declines. Regarding credit availability, the conversation touches on the banking industry's response to potential regulatory changes and its impact on mortgage lending. The belief is that the housing market is better equipped to handle potential challenges this time around due to the stronger mortgage base, improved servicing options, and a more stable lending environment compared to the 2008 financial crisis.
For some, short-term investing in floating rates is simply a default position as they find that stocks are highly valued everywhere, meaning that perfection is often at a premium, which increases the risk for some thoughtful investors. It's not necessarily a matter of timing. For others, it's a way to build a neutral portfolio in a situation fraught with uncertainty. Finding a good investment advisor goes a long way toward organizing and planning this. I recommend Dan Price CFA because of his unique understanding and analytical approach to the markets
not mentioning that equity has evaporated as values have dropped and variable loan rates have risen behind payments and foreclosures increasing
The podcast episode features a discussion about the housing market and its surprising resilience despite initial concerns about a potential crash due to rising mortgage rates. The conversation is led by hosts Tracy Alloway and Joe Weisenthal, who speak with guest Jim Egan, the U.S. housing strategist at Morgan Stanley.
The housing market experienced a historic run-up in benchmark interest rates, resulting in higher mortgage rates. Many expected this to lead to a housing market crash, but the actual outcome was quite different. Instead, the housing market experienced only a slight dip in prices and quickly rebounded, leading to the shortest housing bear market ever.
The main factor influencing the housing market's stability was the limited supply of homes for sale. Homeowners, who had taken advantage of low mortgage rates, were not willing to sell their properties at lower prices. As a result, even though affordability decreased, the lack of available homes for sale prevented significant price declines.
The conversation also delves into factors such as household formation, new home construction, and demand for shelter. The guest, Jim Egan, explains the four pillars that impact the housing market: demand, supply, affordability, and mortgage credit availability. He also shares his forecast for house prices, which had been an out-of-consensus call but has now become more aligned with market expectations.
The biggest risk factor to the housing market's outlook includes a potential improvement in affordability that may lead to higher demand and price increases. On the downside, a harder landing in the labor market could create issues for both demand and supply, leading to price declines.
Regarding credit availability, the conversation touches on the banking industry's response to potential regulatory changes and its impact on mortgage lending. The belief is that the housing market is better equipped to handle potential challenges this time around due to the stronger mortgage base, improved servicing options, and a more stable lending environment compared to the 2008 financial crisis.
Wow that was depressing...
For some, short-term investing in floating rates is simply a default position as they find that stocks are highly valued everywhere, meaning that perfection is often at a premium, which increases the risk for some thoughtful investors. It's not necessarily a matter of timing. For others, it's a way to build a neutral portfolio in a situation fraught with uncertainty. Finding a good investment advisor goes a long way toward organizing and planning this. I recommend Dan Price CFA because of his unique understanding and analytical approach to the markets