The result: The housing downturn will very likely continue. Now that for sure isn’t priced in."
Bill: Headwinds to Housing recap:
- The major headwind is financing. Freddie/Fannie are doing most of the financing - that is, they buy the loans from the so-called banks, who are basically mortgage brokers: Originate and sell. Fannie/Freddie keep some, sell some. This is a big problem. A post will follow in a couple of days about this clogged and fragile conduit.
- Also, there's the huge inventory
- Also there's forclosuregate
- And, per above, appraisals
- Anything else? How about sort-of rising rates these days.
- Update: Extra-tight lending standards
- Oh! Unemployment: Long-term and becoming structural