Worst Housing Market on Record - Why it'll Only get Worse

About this Video

• Video Title: Worst Housing Market on Record - Why it'll Only get Worse
• Channel: Infranomics
• Speakers: The transcript does not name the speaker.
• Duration: 00:34:08

Introduction

This video analyzes the current housing market crisis, challenging common misconceptions and arguing that the situation will worsen. The speaker focuses on interest rates, monetary policy, and the role of the Federal Reserve in driving the market to unsustainable extremes.

Key Takeaways

1. Housing Shortage Misconception: The video refutes the idea of a housing shortage, citing data showing a surplus of housing units and a growth in housing units exceeding population and labor force growth. Policy changes to discourage housing hoarding are suggested.
2. Buying Conditions at Record Lows: Buying conditions are at their lowest levels since 1960, indicating extremely poor housing market sentiment.
3. Home Prices vs. Mortgage Size: The video analyzes the relationship between average home prices and average mortgage size, highlighting an unusual trend where home prices are rising while average mortgage size is falling. This is seen as potentially indicative of an upcoming downturn.
4. Interest Rates as the Primary Driver: The core argument centers on the dramatic increase in interest rates, particularly 30-year mortgage rates, as the key factor driving housing unaffordability. The video emphasizes the long-term impact of these rates on mortgage payments, even if home prices were to fall.
5. The Fed's Role: The Federal Reserve's significant ownership of mortgage-backed securities is highlighted as a key factor artificially suppressing interest rates. The speaker suggests that a reduction in these holdings would likely lead to a sharp increase in mortgage rates and a significant correction in the housing market.