But as I've asked before, what happens going forward? At some point the market must reflect supply / demand at a "natural" clearing price. And that clearing price will depend on how sustainable the recovery truly is.
Source: S&P
Tuesday, March 30, 2010
Housing Prices Flat Year-over-Year
And to get here all it took was subsidized financing (i.e. $1.25 Trillion in mortgage purchases by the Fed), the bailout of Fannie / Freddie / banking system, 0% fed funds, tax credits, and new home supply at 50 year lows.
But as I've asked before, what happens going forward? At some point the market must reflect supply / demand at a "natural" clearing price. And that clearing price will depend on how sustainable the recovery truly is.
Source: S&P
But as I've asked before, what happens going forward? At some point the market must reflect supply / demand at a "natural" clearing price. And that clearing price will depend on how sustainable the recovery truly is.
Source: S&P
" At some point the market must reflect supply / demand at a "natural" clearing price."
ReplyDeleteWhy is that Jake? If the FED is bent on:
-setting low rates
-Not dumping their junk MBS
-Unlimited funding for FNM/FRE/FHA
why would prices ever have to be "real"?
if you think there will always be government involvement, then you are right. my thoughts are the nominal price may never drop (that is what they worry about as the nominal amount is what is used as collateral for loans on banks balance sheets), but the real price will collapse at some point.
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