House Prices Keep Declining
I’ve talked about the obvious, inevitable decline in house prices. Yet, there can be no doubt that this subject is not merely theoretical because prices keep (actually) declining; therefore, this is not science fiction.
Previously, I looked at things like mortgage rates and the Fed’s holdings — or (now) lack thereof — of mortgage-backed securities. Data like that provides a causal link to reliably predict what will happen in the future. Now, we are seeing the fruits of my predictions in current housing prices, see below.
Could the trend reverse? Yes, but the simplest explanation is that the decline will continue; the housing bubble is officially over: the crash is here. How far will housing prices collapse? Nobody knows for sure, but it will not surprise me if housing prices revert back to where they were in February 2020.
Regarding more forward-looking indicators, the Fed’s holding of mortgage-backed securities will continue to go down for a while: it’s only really just now started. With regards to mortgage…
