ThE fEd RaTe CuT wAsN't PoLiTiCaL aT aLl

 

Housing predator Blackstone says housing affordability is comparable to the 2007 housing bubble, but it isn't

Here:

Blackstone’s Joe Zidle calls homes almost as unaffordable as the 2007 peak. Yet, he believes a crash is unlikely due to a major difference: Most owners aren’t using their homes like an ATM.

That's a total smokescreen. Look! Over there! A deer!

Peak unaffordability was actually in 2014, when Blackstone was buying up all the inventory individual homebuyers couldn't afford.

Housing was actually more affordable during the 2007 housing bubble than it is today. The read then was 20.5 but in January 2022 it's more like 17.3, much worse. People who are paying these high prices are nuts. If it all blows up again you can bet firms like Blackstone will be waiting in the wings to acquire bargains you have to sell at a loss.

Meanwhile Blackstone today remains a huge buyer of commercial and multifamily rental real estate, especially student housing:

80 percent of the firm’s real estate holdings are in sectors with shorter-length leases that will allow Blackstone to benefit from rising rents . . ..

James Pethokoukis Trots Out His August 2010 Surprise as a January 2012 Surprise

Involving a supposed mass refinancing of GSE-backed mortgages.

Rush Limbaugh fell for it on his show today, but it's a recycled attempt at a story to which there was nothing when it first appeared a year and a half ago, and there's nothing to it now unless . . . Obama makes another very quick recess appointment, and a bunch of lenders agree to take huge hits.

Fat chance, I say.

Aside from the political toxicity of the former (even The New Republic thinks Obama's recent appointment was unconstitutional), I can't imagine how lenders are just going to agree to eat half of the losses associated with rewriting mortgages at today's lower interest rates, especially with the stiffer Basel III bank capital rules now taking effect: "[T]he plan would have an immediate fixed cost to the government of . . . $242 billion with half that cost split equally between the government and lenders." 

Linda Lowell at housingwire.com, among others, knew the story was malarkey way back when here.

For Pethokoukis' August 2010 version, see here. For the January 2012 version, now see here.