Finally, no bid on mortgage-backed securities

Re:Finally, no bid on mortgage-backed securities by paxys on Monday June 13, 2022 @01:52AM (#31721692)

Those who bought homes 2-3 years ago when 30 year fixed mortgage rates dipped below 3% have already seen their values go up like 30-40%. There is no reason to expect it to crash by that much in the next few years, if ever.

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Re:Finally, no bid on mortgage-backed securities by nathanvanfleet on Monday June 13, 2022 @02:01AM (#31721745)

"Prices have skyrockets in the past two years, but it's impossible for an equal price change in the negative direction though"

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Re:Finally, no bid on mortgage-backed securities by paxys on Monday June 13, 2022 @11:15AM (#31726760)

Possible does not mean guaranteed. Yes prices could go down. But just because they have gone up x% doesn't mean they have to go down x% as well.

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Re:Finally, no bid on mortgage-backed securities by adam_arthur on Monday June 13, 2022 @03:05AM (#31722192)

It's happened before and it will likely happen again, barring rapid and unexpected disinflation.

FL fell 60% in the 2000s, and I wouldn't be surprised to see 40% this time around

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Re:Finally, no bid on mortgage-backed securities by JackFr on Monday June 13, 2022 @06:02AM (#31723230)

The Fed pushed a trillion or so of free money into mortgage markets. That is why house price went up. They have stopped. Prices will likely come down.

While there are likely supply constraints at the margins, the house price gains have been a result of the amount you can borrow at a certain monthly payment being abnormally high.

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Re:Finally, no bid on mortgage-backed securities by andrewla on Monday June 13, 2022 @10:03AM (#31725729)

> There is no reason to expect it to crash by that much in the next few years, if ever.

Was there a reason to expect it to happen in the first place? Aside from ex post facto reasoning?

Housing is a tough market to crash because people need to live somewhere, so if prices fall people just avoid moving, and liquidity drops. For prices to fall substantially requires that people express a liquidity preference -- they'd rather have the money, even discounted, then keep the house. And the primary way that happens is that people can no longer afford to service their mortgages.

This doesn't happen easily, but when it happens, things can break very dramatically.

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Re:Finally, no bid on mortgage-backed securities by trashtester on Monday June 13, 2022 @09:52AM (#31725597)

That depends on the fed. If they raise rates enough to kill inflation, we could have 2008 all over again, possibly worse. But if inflation remains high, the nominal price of the house may go up further.

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