The perfect storm of government MBS purchases and sub-3% mortgages through ZIRP in 2021 combined to rocket housing values by 50%.
Housing reached record low affordability a year later, falling to 17.22%.
Yeah, let's do more of that.
Back in the 1990s, before Bill Clinton and the Uniparty got a hold of it and turned it into a commodity, housing was stable and affordable as median income bought 25% of a home.
Trump hasn't gotta clue what to do.
... In the first two months of the Covid pandemic, as markets reeled, the Federal Reserve purchased $580 billion in agency MBS. It then continued buying more throughout the year. From March 2020 through June 2021, the Federal Reserve increased its agency MBS holdings from $1.4 trillion to $2.3 trillion, according to the Dallas Fed.
The Federal Reserve also lowered its own lending rate to zero. The combination brought the average rate on the 30-year fixed mortgage to record lows, hitting just 2.75% at the start of 2021, according to Mortgage News Daily. ...
... But Zelman also points out that in the broader home market it’s not just the mortgage rate, but overall affordability that is keeping buyers sidelined. Consumers are stretched, and home prices are close to 50% higher than they were pre-pandemic, ironically because of those record-low mortgage rates brought on by MBS purchases. ...
