Home prices are now falling, piling on the Fed pivot from near and dear to the FOMC (models).

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As if there aren't enough suspects which could end the Fed's rate hikes regime (more importantly represent serious threats to the economy and markets), now we have confirmed falling home prices to add to the already-toxic environment. The empty suits at the FOMC are glued to the CPI which reflects last year's home prices while this year's indicate rapid deterioration. What a world.
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16 сен 2024

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Комментарии : 153

@DANVIIL Год назад

Yellin will now get a Nobel Prize.

@MunroLive_ Год назад

Send a direct message right away👆👆

@williamroberts1683 Год назад

I would almost bet money on this

@joelester9360 Год назад

Sounds like Yellen is a good candidate for a Noble prize!

@BrentsTreehouse Год назад

but the pandemic really juiced home prices. Falling home prices for a couple of months is nothing compared to the run-up since 2020. The FED shouldn't worry about falling home prices until they are back to 2019 levels. CaseShiller Home price index was 212 Jan 2020, and now still over 300 Aug 2022 (only come down a tiny bit).

@MunroLive_ Год назад

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@doppelganger9254 Год назад

That is true, but tell that to the home owners who have seen multiples of increases over the last years, that their house "value" is falling off a cliff. Panic can be stronger than reality, no owner will "stay calm" given the food, gas, energy etc prices are increasing. This can really start to snowball fast.

@kenwarner Год назад

@@doppelganger9254 but also tell the multiples of wishful future homeowners that they will just have to be deprived of that future. Housing affordability metrics are at record levels. We had a clear bubble in housing over the last year or two, the only way out of this mess is for valuations to come back to normal so that everyday Americans can buy reasonably priced houses again. Housing is not just an asset whose value should be expected to rise YoY.

@edawg654 Год назад

Despite house prices being lower interest rates go up, driving out those with lower incomes. So only the wealthy can take advantage of the price declines, and the wealthy can withstand mortgage increases. Wealth transition and inequality will run rampant

@michaels4255 Год назад

If you wait that long, then you have probably waited too long. Prices will not turn on a dime as soon as the Fed starts cutting short term rates. The yield on the 10 year note needs to fall because mortgage rates cue off of that, and the Fed funds rate affects the 10 year (and the long end of the curve generally) only very indirectly.

@sssyria Год назад

In my hometown.. the population has NOT increased in the past 20 years but 2 of 3 homes bought in the last two years are bought by “investors” and prices increased by 30% It makes no sense

@pohkeee Год назад

Holy Hell…my first time here…you’re damned good! 🤔👍

@festivetosho7376 Год назад

The assumption that people would respond symmetrically (to the same degree), to prices falling as to prices rising, is an amazing own-goal.

@pauljbusby Год назад

Housing is important because it's a Real hard Asset. Everything else is just Paper. The FED was buying 40 Billion a Month when the Housing Market clearly didn't need it. This is a Criminal act in my opinion. These Criminals need hard Assets at any price to offset the massive amount of Junk Collateral in their Balance Sheet

@k98killer Год назад

Eurodollar University -- frequent lectures, but only one assignment: find a way to fix or replace the eurodollar system. Whoever does this will be the first and only graduate.

@meinking22 Год назад

While I agree that at some point falling houses are a concern, we are in a housing bubble. The Fed is putting pressure on all assets, not just risk assets. Most Americans can't currently afford a home at the current prices, especially with recent hikes in rates. Why should the Fed preserve inflated housing prices?

@kenwarner Год назад

I didn't like the characterization that housing prices began to rise in June 2020 because people were suddenly awash with cash from the CARES Act. Yes the M2 growth is clearly at play at the macro level, but when people think CARES Act they're going to think $1200 checks sent to each American, and that did NOT cause people to rush out to get $450k mortgages to buy new houses at 10-20%+ YoY prices. 25% of houses sold in 2021 were bought by investors (and especially starter homes at the lower end of the market), and that's what blew up housing affordability and led to the bubble and the bust we're starting to go through.

@daraghosullivan1157 Год назад

Yep, and those investors got their cheap money thanks to the Fed.

@rodgerk. Год назад

I believe you are correct. I know multiple landlords who increased their property holdings using margin from their bloated stock portfolios. Additionally, other "well-heeled" friends bought 2-3 extra homes just to have money stored somewhere besides their declining brokerage accounts. Further, there were several real estate syndication funds started in early 2020 to buy hundreds of houses as a hedge against the coming inflation.

@esteban1487 Год назад

no sound

@tomekszwejser7315 Год назад

Jeff, You are talking about people rush to buy properties - because they want to shield themselves from inflation. Well, from my perspective ( I am just poor class working on assembly line in UK ), and maybe more my work colleagues. They rush to buy property because out of the blue banks will give them mortgage with no questions! - seriously, I know people who borrow money for 5%down payment ( they even did not have that !) and then take 220k GBP mortgage, even when they credit check allow them to take 200k GBP! but they look long enough to find "proper" mortgage broker who can make a deal for them. Absolutely craziness !!! Big short all over again.

@jonswanson7766 Год назад

Counting inflated asset as collateral is absolutely not normal bank practice. Central planners have things to accomplish besides profits in one market.

@derekbarbee1141 Год назад

Emil is the eurodollar mascot

@MunroLive_ Год назад

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@jamesshimer9677 Год назад

Exactly. They fooled themselves. Now hiking into a depression

@incawarrior5470 Год назад

Yes, some people bought homes for the wrong reason but most bought because their mortgage came out to be less then rent - it was a rational decision. The supply of housing was tight before COVID and then you add lower interest rates, which made mortgages incredibly affordable, you had a recipe for home value appreciation.

@Martin-qb2mw Год назад

If people didnt factor in the possibility of rates going from practically zero to higher then it wasn't rational.

@mikerinaldi7170 Год назад

@@Martin-qb2mw even if you needed someplace to live?

@incawarrior5470 Год назад

@@Martin-qb2mw You need a place to live, what do you want people to do? If you got a mortgage under rent value (or close to) in the last two years with a low interest rate, you have insulated yourself from the insane rent spikes. Further, it has given you the opportunity to use that house as a future positive cash flowing rental irregardless of what happens to home values. How was that not a good decision? Real estate works as a payment system - It took me a long time to understand this. I use to care a lot about price, but the reality is that the important variables are income, mortgage rates and price. Rents almost never come down (not even during the GFC - they actually increased!), so getting a mortgage under rent value is almost always a good deal. Not a bubble.

@ronarnett4811 Год назад

@@incawarrior5470 All well and good until the value of your home falls below the value of the mortgage. Then the bank comes along and says ....pony up the difference right now or get out..... That is when you can say goodbye to the equity you have in your house. If the unemployment levels that might be driving down the value of your house affect you personally, coming up with the difference for the bank might not even be a remote possibility.

@Martin-qb2mw Год назад

@@incawarrior5470 Investing in real estate is not expected to beat inflation over the long term unless you rent it out. The reason for the massive performance in recent years is the constantly falling rates allowing for more and more leverage. If you miss this concept and buy at a point where rates are so low that they can't possibly fall anymore then you messed up. End of story.

@bestfriendhank1424 Год назад

You need to get Emil back, period.

@jasonstakes4937 Год назад

Where did Emil go?

@rodgerk. Год назад

@@jasonstakes4937 to "walk the earth"

@crazyneutrino8959 Год назад

Always interesting

@jmarie1959 Год назад

Thank you Jeff! Take care!

@agent-8699 Год назад

Lower housing prices/higher rates might be a blessing in disguise. Bubble prices are bad for young people and first time buyers. Higher interest rates might induce builders to focus on less extravagant, more affordable units.

@MunroLive_ Год назад

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@LegalAutomation Год назад

Rising unemployment and a painful reallocation of capital will follow declining asset prices.

@kenwarner Год назад

💯 housing prices absolutely should drop ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-nUFZ1_fC3Kw.html

@RP-le1fp Год назад

Key reasons why the housing market isn't poised to crash and prices won't drop much are as follows: - There are a record low number of foreclosures - Previous mortgages were given at high lending standards - There is still a shortage of total supply of available homes - Millennials, GenZ and immigrants are flooding into the housing market - New home builders haven't built enough new homes in the last 15 years. - 85% of homeowners are setting on 2% to 3% fixed rate loans and making their payment with inflated dollars at face value.

@57pickles Год назад

As if the Fed would ever ask “what have we done?”

@Michael-qy1jz Год назад

No sound?? Please re upload

@SamanthaIreneYTube Год назад

Mascot Idea: The Printing Powells (I’m thinking like the giant Presidents the Nationals have, but Jerome Powell running around with a pasta machine)

@tetrixdog Год назад

... or (as a mascot) how about a London banker in a bowler hat with a ledger full of dollar loans on the back of a napkin?

@danhovsepian8741 Год назад

Not just a fight song, a football team. The Fighting Bank Reserves. Go big green.

@MunroLive_ Год назад

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@point234 Год назад

What's really funny is homeowner equivalent rent suppressed CPI for years, allowing for the ridiculous monetary policy and NOW, its keeping the cpi high lol. Just love central planners. Even their fraud backfires on them.

@daraghosullivan1157 Год назад

Yep, except they always cheat by changing the definitions to allow them to inflate more.

@jamesruscheinski8602 Год назад

lower interest rates for mortgage borrowing by the amount of inflation to help stimulate home buying; while raising interest rates for government borrowing to stop inflation

@justjacqueline2004 Год назад

My former bosses bought art that was transferred from the UK to the USA and Russia by putting it under their arms and getting on planes, quite astounding.

@polymerization9534 Год назад

Why yes, I go to Eurodollar University, go Bank Reserves. The world is flooded with us

@svenanderson9085 Год назад

I want Emil back!

@andymcgowan9819 Год назад

Why wouldn't the Fed have seen housing prices tanking? They had to have been expecting that so I am not sure I buy this thesis. Japan causing another currency crisis in Asia because the Yen is exploding next to the Dollar seems way more likely of a reason for the Fed to pivot. Housing won't do it.

@MunroLive_ Год назад

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@professionalgambler74 Год назад

Thanks Jeff

@bruceclark7903 Год назад

Jeff, I absolutely love your content. I look forward to a new video ever day. Would you be will to do a video on what you would do if (by the grace of God) you where appointed Fed Chairman today AND you had to deal with the congress and it’s likelihood of more spending?? Thanks.

@edmundcheong8723 Год назад

Inacurate analysis as most people would already owned their homes donkey years. The current drop is only paper losses from the last 10 years of paper gains. Only when prices falls below their purchase price before people will feel poor.

@IslamicRageBoy Год назад

If the fed doesn’t matter how does it cause a housing bubble

@Newlinjim Год назад

The FED controls interest rates which effect asset prices, the congress controls budget policy which debases the currency. Bubbles are formed by that currency seeking to protect its purchasing power and finding limited options.

@daraghosullivan1157 Год назад

The Fed matters. It can print more money and encourage it to circulate. Physical stuff you buy doesn't magically increase as much as the amount of extra money, so the Fed facilitates inflation.

@McCallumMade 2 месяца назад

This hasn't aged well.

@joachimlindback Год назад

Thanks

@MunroLive_ Год назад

Send a direct message right away👆👆

@norvikvoskanian4294 Год назад

Fear of inflation and dollar "going to zero" may have motivated some but you can't ignore the low interest rates as an incentive that fueled a shopping spree + the idea that housing has been a great investment based on recent data

@fishtherapy100 Год назад

WHEN has the FED toppled CPI without the FFR at……or above CPI/PCE. Answer: NEVER.

@waclawberent Год назад

No sound We need Emil back

@randomme0no Год назад

Fake nice I hate unnecessary music top notch work Jeff

@fernandinand Год назад

Theme song: The imperial march

@vallmak Год назад

Make Emil come back.

@MunroLive_ Год назад

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@glennwetherbee4495 Год назад

Good video. Thanks

@festivetosho7376 Год назад

And where is Emil?

@HeartForChrist777 Год назад

People must lose faith in the current system before they roll out the new digital commodities backed system. Make 1984 fiction again… And Jeff, yes.. a theme song is definitely needed!

@milkshakeplease4696 Год назад

that would risk them losing their power

@canaldrip2523 Год назад

Awesome job dude!

@MunroLive_ Год назад

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@Unlikelygap123 Год назад

Why were those quotes from Ben Bernanke and Yellen from 2005? Is that when people knew something was about to happen? I’m too young to remember.

@rodgerk. Год назад

In 2005 house prices were absolutely ballooning (I mean, the rate of change was truly ridiculous) and these quotes show the Fed's out-of-touch attitude leading up to the Great Recession that started in late 2007. Those quotes demonstrate their hubris at that time and Jeff is extrapolating that we can expect them to behave similarly today. Watch "The Big Short" for a dramatization

@sergiootero5904 Год назад

Theme Song: David Bowie - The Man Who Sold the World

@grumpa5798 Год назад

Keynesian Economic theory will create the greatest economic collapse in the history of mankind An economic belief system that is dependent upon people buying things which they do not need with money that they do not own.

@MunroLive_ Год назад

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@jonscr6499 Год назад

"Holy Hell what have we done"

@dan2304 Год назад

I appreciate that Jeff unlike many commentators sticks to his field of expertise. However: There are many challenges facing the global economy. Global net debt to global GDP is estimated at 400%. Debt is a commitment of future energy at unknown supply or cost. Global supplies of the necessary minerals, metals, energy and food are challenged. Geological commodities: Energy, minerals, metals, discoveries have been in decline since the 1970s, new discoveries are very unlikely. Current reserves are in decline with increasing real costs. Global warming is having real and increasing negative impacts. Geopolitics is turbulant with a real probability of WW 3. Jeff's Eurodollar is just one.

@MunroLive_ Год назад

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@nobodyspecial8807 Год назад

small business also secure payroll and credit lines with owner real estate

@shawnebeal6863 Год назад

You will know the real estate market is about to collapse when banks start offering interest only home loans like bank in 2005-2008. I know because I was a builder then. Fed will pivot because they are looking back not foward

@MunroLive_ Год назад

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@theinflationsituation8870 Год назад

Holy hell! What have we done? 👍😂

@sandymilne224 Год назад

Funny! 😀 How about an honest update on Emil. We all care for his well being… 🙏

@MunroLive_ Год назад

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@bhushanmanjarekar2144 Год назад

Can you share chart of 2y forward and cash as you mentioned for rate decision

@MunroLive_ Год назад

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@E3kTheCat Год назад

No sound. There is no sound. Please re-upload

@pabsmanhere Год назад

What about the theory that because housing prices went up so fast, their going back down wont cause as much damage to the economy? Most people will have just watched their equity go up and back down without enough time for too many to put themselves in a bad financial situation. I havnt heard thid idea discussed by anyone, just some personal musing I keep hoping someone more qualified will talk about.

@MunroLive_ Год назад

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@rodgerk. Год назад

I agree. We aren't nearly as upside-down and over-leveraged as we were in 2007. A huge decrease in home values now will mean increased foreclosures, decreased inventory and decreased rents because the recent booming numbers will revert to the mean. The stock market crashing would have a much greater impact on the wider economy and affect people's income. But real-estate could be the pin that pops that bubble.

@AnthonyGiallourakis Год назад

Home prices are already turning back up. The soon as buyers (there are plenty waiting in the wings) and investors in residential real estate sense that the FED is reaching terminal rates, or they even think they know when that is, they will rush to grab what's for sale before prices skyrocket again. It's delusional to think we're heading for another housing bust, we are not. Property is becoming scarcer and scarcer, real land. In the county I live in, there's literally almost no raw land left to build new single family homes, yet the population continues to go up and up. No one cares what the mortgage rates will be when buyers sense they will peak, because they will load and refi later. In addition, you still have plenty of people who can afford to pay cash for homes, and you have foreigners who still want some of their assets in the US for geopolitical reasons - which continue to deteriorate in favor of the flight to the US (safety/quality).

@MunroLive_ Год назад

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@rodgerk. Год назад

Your argument might make sense if incomes were keeping pace with house prices. Historical housing affordability ratios haven't been seen in many years so these current numbers are unsustainable and fueled almost entirely by cash buyers. That's why I think the real concern is a stock market crash because then all those people who used margin accounts to pay cash for homes will need to sell quickly. My anecdotal evidence tells me this describes a large percentage of cash buyers over the last two years.

@AnthonyGiallourakis Год назад

@@rodgerk. The amount of investment capital being transferred from those in their 80's-70's down to those in their 60's through 40's is staggering. Money is moving from mostly income oriented investments into cash that is then being reinvested in stocks and real estate, especially investment properties (for cash). This is the largest wealth transfer in history, anywhere on the planet. It's going to continue for another decade or so, until that wealth has been divested of (from that generation). It's not just margin capital that is going into real estate. That's probably only a very small amount of it and if you look, total margin debt has declined sharply in few quarters.

@stoneyj1a1 Год назад

So pivot is otw?

@tonyblaylock1309 Год назад

Where is Emil? He never had this problem.

@petterandersson7429 Год назад

No Audio

@DougSmileyVirgo Год назад

Hoping Jeff redoes this because I'm hedged and waiting for the housing crash.

@incawarrior5470 Год назад

If unemployment is extremely high for a prolonged period of time AND interest rates stay elevated then you will see a housing crash. Jeff doesn’t think rates will stay this high (which I agree), so it will be hard for housing to “crash”.

@incawarrior5470 Год назад

@Kevin Schmidt Accompanied with adjustable rate mortgages and poor lending standards, which later forced owners to sell their homes because they couldn’t afford their new interest rates. You need forced sellers for their to be a crash in home values. That’s why I’m saying you need high unemployment for a prolonged period of time coupled with high interest rates for their to be a crash. The lending standards are much higher today, so you won’t get forced sellers from that angle. I don’t think these last two years was a “bubble” in real estate. Lower interest made mortgages more affordable, which made buying a home a more compelling option then renting - it was completely rational for people to buy homes.

@bellakrinkle9381 Год назад

@@incawarrior5470 wait until after Mid terms...the mkt will continue to be gamed up until then. Housing is now in positive territory.

@johnryskamp2943 Год назад

Guess what? The eurodollar doesn't care about: 1. housing 2. deflation 3. interest rates 4. China Sorry. Try coming up with a direct measure of black box biparty repo. PROXIES ARE IRRELEVANT.

@darinthesecularspiritualist Год назад

j dimon told us that the recession will not be coming til another 6 to 9 months; he did seem a little shaky when he said that

@MunroLive_ Год назад

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@michaels4255 Год назад

Is it possible that the market is underestimating Chairman Powell's determination to "play Volcker?"

@daraghosullivan1157 Год назад

Powell doesn't pull the strings.

@randyosborne3971 Год назад

HUD which is the ruler of all American residential real estate is based on racial preference. Keep a good watch.

@MunroLive_ Год назад

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@zzbeasley Год назад

It is funny of course but as they say don't laugh, or you will be cancelled. lol These are people who are as serious as death and just as certain. Thanks anyway but don't expect a Noble prize because the Swedes are even more 'serious'.

@joematties7557 Год назад

I see all these channels looking for views spewing this crap and I go look at house prices in this area and nothing has changed. It's still 250k to buy a rot infested 1200 sq ft house. 100k for a half acre if you are lucky. hasn't moved an inch and inflation is still going up. We have a long ways to go and the rich are still buying anything that goes up for sell.

@daraghosullivan1157 Год назад

Most people in finance, and many others, especially those receiving government funds, derive much of their income from inflation. They pretend it's low when it's high.

@patty109109 8 месяцев назад

A year later your comment aged well. This guy is another in a long list of doomporn pundits who constantly scream the sky is falling, to the applause of their broke commentators who are desperate to justify the fact they ignored conventional investing wisdom (invest for long term and ignore haters).

@SmashBrosBrawl Год назад

Didn't houses crash during the Great Depression? Isn't Bernanke an expert on the great depression?

@SmashBrosBrawl Год назад

@@jonswanson7766 bingo.

@dreambotter6389 Год назад

So Fed will cut rates in Nov ?

@Newlinjim Год назад

No he will definitely not cut rates in Nov.

@tonyblaylock1309 Год назад

Hell no!

@dreambotter6389 Год назад

@B ok i will

@abandonedamusement208 Год назад

So they r all of a sudden going to avoid a recession 😂

@robrigutto6756 Год назад

Isn't high inflation desirable if I owe a lot of money - I can pay back with inflated dollars in the future.

@Newlinjim Год назад

Only if the underlying asset maintains its value. The price of housing has been stolen from the future and as rates rise prices fall.

@jonscr6499 Год назад

immer noch viel Bargeld... Hey, i understood that. hehe

@aerok4880 Год назад

I suggest Jackass intro

@SamEbby Год назад

no no no people did not buy houses because "everybody thought the dollar would go to 0" that is simply not true at all. the work from home economy had people wanting bigger and better houses. that is what in part helped to really add more fuel to the fire of increasing home prices. it was the desire for bigger houses and the desire to leave the city and move to the suburbs in addition to the lack of available supply. not "people wanted real assets because they thought the dollar would collapse" that theory is just nonsense. people don't think like that. get out of your office more

@MunroLive_ Год назад

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@johnryskamp2943 Год назад

It can invert its ass off. Rates will only increase. Figure that one out, Jeff.

@MunroLive_ Год назад

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