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A comment on Anxiety Strikes $8T Mortgage-Debt Market After SVB Collapse. Parent comment

Re:Anxiety Strikes $8T Mortgage-Debt Market After SVB Collapse by jyu on Tuesday March 21, 2023 @10:17AM (#35246463)
It's more a supply / demand issue than anything to do with mortgages. When an essential good's (housing) demand outstrips supply, all surplus goes to $0 to reach the clearing price for that supply.

Ex: In SF there were a lot of good big tech jobs paying $200k-$1m / yr. A vast majority of those wage increases accrued into the hands of landlords. Mortgages allow buyers to borrow against projected future earnings, allowing each buyer an affordable price compared to one who doesn't mortgage, but when everyone does it the benefits get nullified.

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Re:Anxiety Strikes $8T Mortgage-Debt Market After SVB Collapse by s1artibartfast on Tuesday March 21, 2023 @10:29AM (#35246678)
The benefits aren't nullified. As a result you have more homeowners and fewer people paying rent.

This is the desired outcome.

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Re:Anxiety Strikes $8T Mortgage-Debt Market After SVB Collapse by treis on Tuesday March 21, 2023 @11:58AM (#35248053)
But that's because SF broke their real estate market. In a more functional one the cheap money flows to builders as well and they then build more houses bringing prices down.
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