[Aces4]

Originally Posted by Boomer

SQUIRREL!

Geez.

Don’t be so easy, so naive.

Gas prices are literally the most visible piece of the economy. If you are in the habit of noticing gas prices on signs you drive past regularly, you know that those prices can change from morning ‘til night and day to day. Gas prices are easily manipulated and can give a false sense of everything getting all better now.

Ridiculously low interest rates, at the beginning of this century led to idiotic lending practices based on stated assets loans and drive-by appraisals. Then came the derivatives. Supposedly nobody saw the housing crisis coming. HAH! It was easy to see because it made no sense. Those rates were the give-away of the century — so far. That bubble had to pop and so it did. When Bloomberg magazine was still a thing, they had some artsy covers. There was one that was a drawing of a house with a cobra coming out, ready to strike. That cover was a piece of economic history.

Did real estate and banking learn a lesson from the housing bubble? Well, yes. Mortgage qualifying tightened.

This time though, the effect of those low rates on all of us, mortgaged or not, has been more insidious……

Corporate landlords, private equity, institutional investors, have been buying up houses, especially those for first-time buyers, and got a foot in the door like never before, and slammed that door in the faces of young buyers.

Planet Money had an interesting article on September 8, titled “Here’s What Happens When Private Equity Buys Houses in Your Neighborhood.” Read it and think about it and stop being distracted by gas and eggs. You can bet big money is drooling over being to grab up more houses if the interest rate returns to ridiculously low rates.

Those who think TV is a safe island might want to think again. 3 bedrooms + 2 baths = The perfect rental.

Boomer

Thank you! You succinctly stated and with references, covered the exact issues of which I was speaking. It is a mess out there and absolutely ridiculous what the investors have created in the housing market because of what I call free money. Let's face it, another drop in interest rates will push more investment money into real estate, it has to happen. That will leave more first-time homeowners out of the market.