Re:Asking rents in San Francisco continue to slip, but…
by imtringued on Tuesday April 27, 2021 @07:24AM
(#26954480)
I wonder how many weird deflationary forces are acting on this economy. Fed buying mortgages causes people to get into debt for their house, ironically they end up consuming less, which drags down inflation and the cycle repeats endlessly with no hope of inflation going up to justify increasing the interest rates.
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Re:Asking rents in San Francisco continue to slip, but…
by gregwebs on Tuesday April 27, 2021 @09:46AM
(#26955743)
In the long-term I think buying a house at a low fixed rate builds wealth and leads to greater consumption and less reliance on government transfer payments (although the mortgage itself could be considered a government transfer payment). As the fixed mortgage payment gets reduced over time due to inflation the homeowner has greater ability to consume if their wages keep up with inflation.
The only thing we know for sure is that the fed buying MBS has a strong inflationary effect on the housing market that can be seen in the record housing prices.