Reply to Federal Reserve: signs abound that housing market is entering bubble territory

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Be wary of over confidence on either side. For my job I get exposure to some of the greatest minds on finance, and the amount of folks that predicted that the market would hit all time highs in the midst of record setting coronavirus numbers and new variants is zilch. The point being, people on an anonymous forum, most of whom are lawyers, doctors, lobbyists, stay at home moms, won’t be able to predict what happens to asset prices, so stop mentally masturbating on here even though it can be fun because it’s a waste of time. [/quote]

They didn't predict a record high because it is fake.

All US assets from housing to stocks are grossly overvalued because of the Federal Reserve, massive amounts of money printing, massive injection of multi trillion dollar stimuluses, and too much credit liquidity.  It is a fake diabetic sugar rush.  Bubbles built on cheap and easy money they produce an environment of irrational exuberance when people all think stocks or housing only ever go up always end so badly when the sugar rush ends. [/quote]

Agree on stock market.

[b]Housing is different. People need a place to live. Unless people are foreclosing we won’t have a bubble “pop”.[/b]

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This is EXACTLY (word for word) what all of the economists said when they were explaining why there wouldn’t be a crises in 2007.

I don’t know if the bubble will pop or not, but people saying stuff like this to explain why it won’t makes me think it’s more likely, rather than less. [/quote]

It’s much different today. Predatory lending is not rampant. ARM loans aren’t going to jump out of control.

People were foreclosing because they were in precarious financial situations. That’s not the case today. 
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Yup. No NINJA loans. 
If you don't have three years of taxes showing consistent income, you won't get a mortgage. I have so many friends who own their own businesses and they've had a tough time getting mortgages, even if they have significant assets.
Income streams from AirBnB and VRBO didn't exist during the last financial crisis. 
Everyone who owned refinanced into a sub-3% 30 year or sub-2% 15 year mortgage since spring 2020 so monthly payments are down relative to three years ago.
And there's still the issue of supply in major job centers not keeping up with demographics. Not enough family-sized housing for Millennials and the older cohort Gen Z near major cities.

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