
The Fed now owns nearly 1/3 of all U.S. mortgages - elsewhen
https://www.thestreet.com/mishtalk/economics/the-fed-now-owns-nearly-one-third-of-all-us-mortgages
======
JMTQp8lwXL
I would be curious to see analysis for what home prices would be with 0 Fed
intervention. Also, I don't understand how millennials aren't supposed to see
this figure and immediately feel a sense of rejection, that the housing market
is some form of a pyramid scheme, where you had to get in early to have a
chance.

~~~
refurb
_I would be curious to see analysis for what home prices would be with 0 Fed
intervention._

It is an interesting thought experiment. From what I've gathered, any
intervention by the government to make housing more accessible, just gets
priced in pretty quickly, removing the benefit.

For example, FHA offering 5% down payments instead of a standard 20%, just
means every first time buyer can now pay 15% more (approximately) for a house.
In hot markets, the prices rise quickly to reflect that and everyone is in the
same position as before.

It obviously benefits buyers in non-hot markets. It's pretty nice to put $7500
down in the mid-west for a house.

I assume that without any federal intervention, the housing prices would be as
accessible as they are today, prices would just be lower so that that the same
number of people could afford 20% down and 5-year term mortgages with the
resulting interest rate risk.

~~~
gwd
> From what I've gathered, any intervention by the government to make housing
> more accessible, just gets priced in pretty quickly, removing the benefit.

You say "any intervention", but you've only mentioned interventions that give
more money. Other interventions:

1\. Encouraging developers to build new properties, particularly properties
for low- and medium-income tenants

2\. The government building low- to medium-income housing themselves.

The problem with any policy, of course, which aims to bring down the prices of
houses makes everyone who's already bought a house very unhappy.

~~~
tfigment
And they get unhappy because they have been trained to think of housing as
investment that should grow faster than inflation rather than a place to live.

~~~
tnel77
You don’t treat a couple hundred thousand dollars as an investment? Sounds
privileged.

~~~
gwd
I think you've got it backwards. If new cars all cost $200k, would you buy one
as an investment? No -- you'd either not buy one (unprivileged) or buy one
anyway realizing it's a cost (privileged).

I might spend $100k on a house that I was going to live in for 20-30 years,
even if I knew that at the end of that time it was going to be worthless. But
I certainly wouldn't spend $500k+ on a house unless I knew I'd be able to sell
it for more down the road.

~~~
daed
What if the cost of the monthly interest on your mortgage for that $500k house
was less than your rent?

~~~
gwd
If it's an interest-only mortgage, _and_ you are _sure_ the value isn't going
to go down, then fine.

But if you're putting in capital, you have to factor in the cost of money.
There are far better things to do with $500k than to park it in an asset that
doesn't appreciate.

And of course, you have to factor in the risk that the price will actually
drop. Risk isn't free either: it doesn't make sense to take a risk that you
may lose money, unless there's a counter probability that you will actually
gain money instead.

Even if your _monthly payment_ was less than your rent, you still might be
better off doing something else. To get a good interest rate you need 75% LTV;
which means on a $500k house you need to put up $125k up front. You might be
better taking that $125k and investing it in an S&P500 index fund, and then
paying rent, than taking that $125k and putting it into a house and making a
mortgage payment. (Obviously you need to do the actual math here to see if it
makes sense or not.)

<EDIT>And of course there's the diversification aspect too. If your net worth
is $300k ($500k house + $50k other investments - $250k mortgage), it would
normally be a really poor decision to have 166% of that ($300k / $500k) in a
single asset, whose value could drop drastically for any number of reasons.

All that to say -- if your house _isn 't_ an investment, it had better be
_significantly_ cheaper than renting before it makes financial sense.</EDIT>

From a societal flexibility perspective, it's much better if most people rent;
particularly poorer people who can't as easily from the economic shock of
having their house lose all its value. If the bottom fell out of the economy
in the city I'm in, and my house's price dropped by half, I could afford to
cut my losses and start over. A lot of people are stuck.

I'm told that Germany is very different. It's not at all expected that people
strive to own their own home; people rent the same place for decades and are
perfectly happy. Because they've never had out-of-control housing prices (at
least, not in the last few decades), they can keep things rational.

If the UK's policies suddenly looked like Germany's I'd probably take a
massive haircut on the house I own. Personally, I'd be willing to do that if I
knew it would make things better for other people; I'd be OK financially. But
a lot of people wouldn't, so I understand why it's difficult to change.

~~~
sizzle
ROI on paying rent vs mortgage is negative due to no equity building and the
opportunity cost of that money disappearing vs paying yourself with each
principle portion of your mortgage payment.

We all need a place to live so a house serves a physical utility as well that
other investments do not, in addition to being able to collect unlimited rent
when the mortgage is eventually paid off eventually. I think there is a lot of
upside to home ownership if it is financially feasible.

------
nostromo
The headline isn’t correct.

There is $17T in US mortgage debt. The Fed has backed $2T of that via mortgage
backed securities, up from $1T pre-Covid-19.

That’s ~11% not 1/3.

The article itself mentions this, but decided to use a misleading headline
instead.

~~~
divbzero
Thanks for pointing out the misleading headline. I double-checked your dollar
value for total US mortgage debt and it’s in line with what the Fed reports.
[1]

The article correctly shows that the Fed is still buying more government debt
than mortgage backed securities. As of June 2020 the Fed owned over ⅕ of all
US government debt and over ⅓ of longer-dated US government bonds. [2]

[1]:
[https://www.federalreserve.gov/data/mortoutstand/current.htm](https://www.federalreserve.gov/data/mortoutstand/current.htm)

[2]: [https://www.economist.com/finance-and-
economics/2020/06/18/t...](https://www.economist.com/finance-and-
economics/2020/06/18/the-fed-has-been-supporting-markets-now-it-must-find-
ways-to-boost-growth)

~~~
koheripbal
> As of June 2020 the Fed owned over ⅕ of all US government debt and over ⅓ of
> longer-dated US government bonds.

That's one-fifth, and one-third, respectively for anyone else having a hard
time reading it.

------
mcculley
When I was a boy my elders told me that we had to win the Cold War or we would
end up with the government owning everything.

~~~
tengbretson
Well the federal reserve isn't part of the government, so hurray for us I
guess.

~~~
havetocharge
Wikipedia says that it's under the jurisdiction of the Federal government of
the United States. So maybe depends on how you define 'government'?

[https://en.m.wikipedia.org/wiki/Federal_Reserve](https://en.m.wikipedia.org/wiki/Federal_Reserve)

~~~
dmurray
Maybe it depends how you define "under the jurisdiction". Every citizen and
corporation in the US is subject to the government's jurisdiction.

------
b34r
Out of curiosity, why wouldn’t we want the government managing mortgages for
the whole country? (Assuming the acquisition process isn’t slow AF because
government.)

Real estate seems like a pretty important part of the economy and, more
importantly, the government artificially making housing more accessible for
potential first time buyers creates a virtuous cycle where people can finally
save money and the eventually spend that money to stimulate their micro
economies.

~~~
qeternity
> Out of curiosity, why wouldn’t we want the government managing mortgages for
> the whole country?

> Real estate seems like a pretty important part of the economy...

You just answered your own question. Governments do not have a history of
distributing scarce resources effectively. You need various market forces.

> the government artificially making housing more accessible for potential
> first time buyers creates a virtuous cycle where people can finally save
> money and the eventually spend that money to stimulate their micro economies

This is not what happens. As you said - it's artificial. Markets, like the
internet, route around this sort of censorship. Any attempt to make housing
artificially more affordable will have the effect of increasing demand (by
design). When you increase demand, prices rise. And thus becomes unaffordable
again. You can then increase the subsidies further to try to offset your
original manipulation, which will only worsen the problem. This is precisely
what happened in the 90s/early 00s and the result was the 2008 housing bubble.

~~~
black_puppydog
> Governments do not have a history of distributing scarce resources
> effectively.

To be fair, "various market forces" also don't have the best track record of
distributing resources, _especially_ scarce ones. Somehow those always end up
being "distributed" into the same few hands...

~~~
crisdux
To be fair, how is that even remotely true? Look at the wealth, convenience,
leisure and abundance all around you. Even people with lower income experience
high standards of living. The system we have now is not without fault, but it
has done better than any other before in meeting our needs and desires.

I don't understand why people make wild claims that everything is distributed
to only a few hands, thats preposterous. If you really believe that, you are
poisoned by ideology.

~~~
charlesu
> Look at the wealth, convenience, leisure and abundance all around you. Even
> people with lower income experience high standards of living. The system we
> have now is not without fault, but it has done better than any other before
> in meeting our needs and desires.

You should spend some time in Appalachia if you think that's true.

~~~
crisdux
You are making a logical fallacy and I don't think it's worth my time to
actually attempt to discuss this with you.

~~~
charlesu
There's nothing to discuss because you don't really have much of an argument.
"Look around. Things are better than what they were" doesn't negate the fact
that market forces are bad at distributing resources. You can look at the
COVID-19 crisis as well. "Market forces" led to distribution channels with no
redundancy, leaving the United States with a shortage of something super
basic: PPE.

~~~
motorcycleman9
You continue to state that market forces are bad, while not paying any
attention to the counterargument that they are pretty good compared to the
alternatives. Making an honest comparison would be a much tedious discussion.

~~~
charlesu
I'm not saying market forces are categorically bad. I'm saying they're bad at
_some_ things. Market forces are terrible at distributing housing, healthcare,
and primary education. As with most things, there's a happy medium between
unfettered market forces and central planning.

------
lvs
There would be no inherent problem with having the Fed hold this much debt, if
the tax system then soaked up distortions in how the resulting stimulus was
distributed into the economy. That is, if the tax system is structured to pull
back currency from unproductive sinks before it yields inflation, then there's
no problem with the Fed holding that debt.

A better structure, as others have pointed out, would be to have the Fed just
hold the government's debt, so that allocation and taxation can both be
managed by the government. At the moment, the Fed and Treasury (via Congress)
are both competing to play an allocating role in the economy at the same time,
with no real coordination or plan.

~~~
baconandeggs
_OR_...you could let nature run its curse and have those debts refinanced at
real interest rates that reflected the actual production in the economy, or
defaulted and have those assets and resources liberated, thus correcting the
distortions which were product of the FED and the government in the first
place.

~~~
lvs
Well, it all depends on what you think the purpose of an economic system is.
Perhaps you'd just let the mortgage market blow up, if your only concern on
this Earth was to know exactly what the market price of an asset was. But
you'll have to explain to me how you think the distortions are the product of
Federal Reserve and government policy, since I am not following whatever
you're alluding to. The distortions I see are inherent and inevitable products
of the economic system we currently have, not the product of any specific
policy. In fact, these distortions seem to be the product of an absence of an
adequate policy to alleviate them.

------
hn_throwaway_99
I keep thinking of all the huge amount of asset purchases by the Fed,
especially legally dubious purchases like corporate bonds, that "this won't
end well".

That said, I don't really know what "not ending well" would look like. Would
it just be total runaway inflation? Can anyone more knowledgeable comment on
what possible endgames are for these asset purchases?

~~~
remote_phone
The worst case scenario is the rest of the world dumping US treasuries, and
causing interest rates to skyrocket and USD to plummet.

~~~
JackFr
The rest of the world buys US treasuries cause we buy their goods. China buys
treasuries because we buy goods with dollars. China has to do something with
the dollars. They can buy goods or they can buy assets. They aren’t that
interested in our goods, so they buy bonds. If they wanted to unload the
dollars they certainly could, but that would weaken the dollar and strengthen
the yuan and make it unattractive for the US to buy goods from them.

Despite the Fed going where they have not before (and probably shouldn’t go)
the world probably isn’t going to dump treasuries because of it.

~~~
dternyak
> The rest of the world buys US treasuries cause we buy their goods. China
> buys treasuries because we buy goods with dollars. China has to do something
> with the dollars.

It strikes me as extremely odd that it's become so normalized that the U.S.'s
role in trade is simply as a buyer of goods.

In any transaction, both parties are typically better off after having made
the transaction, else one party would refuse.

The U.S. clearly benefits by acquiring goods, but is China really left
scratching their heads with what to do with the dollars (and then throwing a
dart and purchasing treasuries with their overflowing dollars)?

If China (in aggregate) is never interested in buying our goods, why would
they want to compound the number of tokens that can be redeemed for future
goods (by buying bonds)? Do they simply not want to buy goods now, but know
they will want to in the future? Are they entirely interested only in the
assets, but think the goods are not valuable, or at least not valuable for
them, but maybe are for others? Doesn't that put into question the value of
any assets the country might have to offer if the goods that the country
provides are seemingly undesirable?

Clearly, the value the U.S. is providing can't simply be as the purchaser of a
good. The U.S. is trading future obligations for current goods, and the
trading partner must have some belief that they will eventually execute that
option on future obligations, or trade the future obligation to someone else
who will want to execute it, else this token clearly has no value.

However, I do also wonder how much of the demand of U.S. dollar is simply a
system of inertia. At some point the trading partners may realize they have no
interest in acquiring tokens that they will never redeem, even if this token
can be compounded further for more tokens that will never be redeemed.
Currently, it seems China is interested in acquiring these tokens because of
the reserve currency status, as they trade with other partners in.

The other possibility is this entire narrative is incorrect, and there are
other benefits to running massive trade surpluses beyond the future token
redemption. Skill building could be one these benefits - the deficit trading
partner (U.S.) is shaping the development of labor markets in an journeyman-
like form.

~~~
adventured
> It strikes me as extremely odd that it's become so normalized that the
> U.S.'s role in trade is simply as a buyer of goods.

It should strike you as odd, what you're saying is wrong.

The US exports $2.5 trillion worth of goods and services, including $1.7
trillion of goods.

The US is the world's #2 exporter of goods. With services included, the US is
nearly the world's #1 exporter. In 2018, the US was behind China by only about
$80 billion in total exports. That's nearly three times the #4 export country,
Japan.

~~~
dternyak
Of course, I'm familiar that the U.S. exports goods as well. Certainly the
relationship specifically with China is one of a large and continuous trade
deficit.

However, the broad intention of my previous comment is to illustrate that the
narrative being that the U.S. is simply one of purchaser is lacking, or else
if that narrative is correct, it will not be true for much longer once the
trading partners catch on.

~~~
JackFr
The same question was said about Japan in the 1980's. There was much hand-
wringing over our trade deficit with Japan. (Though I had an econ professor
back then who I thought put it best: "We're getting cars and they're getting
pieces of paper, and somehow we're the ones getting screwed?")

~~~
_dps
The professor's quip is cute but myopic. The pieces of paper are claims on
future production so the true cost is seen later.

The end result was

    
    
      - American Boomers got cars
    
      - Japanese boomers got USD
      
      - Japanese investors then spent much of the USD on things like US real estate investment vehicles (hardly Japan only, any country that collected large amounts of USD due to trade deficit)
    
      - American Boomers in prime markets saw tremendous returns on real estate
      
      - and American millennials 30 years later got priced out of houses
    

Yes I know foreign investment is not the only cause of rapid price growth in
real estate. But it is a significant contributor.

------
felipe_ii
I don't understand what is being used as the denominator to generate this 1/3
number in the headline. A quick search shows that the US MBS market is about
$10.3 trillion in size [1] - the actual mortgage market is larger (what
nostromo mentioned earlier). Putting some recent numbers [2] over the size of
the MBS market would show that the Fed owns a little less than a 1/5 of all US
MBS.

Also, he mentions that the Fed has been purchasing roughly $100 billion per
month in MBS securities since April, but this leaves out the fact that a non-
insignificant number of MBS in their holdings are either i) reaching maturity,
or ii) being prepaid. The second issue is more prevalent now - with the low-
rate environment that exists in the US many people are refinancing their
mortgages to take advantage of lower rates, but in any case it isn't uncommon
for mortgages to be paid off before their maturity date. I don't know what the
net figures are, but what I'm trying to say is that purchases of MBS != growth
of MBS holdings.

I seriously think this author has somehow conflated the size of the SOMA
assets with the size of the MBS market - continuing growth of MBS at $100
billion for the rest of the year, leaving all else equal, will give us about
$2.4 trillion of MBS over a denominator of $7.4 trillion - which would give us
about 1/3.

[1]: [https://www.sifma.org/resources/research/fixed-income-
chart/](https://www.sifma.org/resources/research/fixed-income-chart/) [2]:
[https://www.federalreserve.gov/releases/h41/current/](https://www.federalreserve.gov/releases/h41/current/)

------
coronadisaster
The homes around here (suburb) fly off the shelves even if prices are higher
then the last bubble (~2007)... not sure what is going on. Could people be
moving away from large cities because of covid-19 and remote work
opportunities?

------
nic_wilson
In case anyone else was wondering how this might compare to "normal":

>Morgan Stanley analysts pointed out in late March that the buying was running
at eight times the pace seen in prior episodes of Fed purchasing under
programs known as quantitative easing.

>Just before this latest round, principal payments from its mortgage bond
holdings had whittled that down to 21%, but it has now increased back to 30%.

------
christkv
More interesting than they owning 1/3 of the mortgages is what quality is the
mortgages they own. Are they all sub prime quality? If they are is this a
strategy to save banks from a default crisis in the near future without taking
the systemic hit like 2007.

------
natcombs
>> Morgan Stanley analysts pointed out in late March that the buying was
running at eight times the pace seen in prior episodes of Fed purchasing under
programs known as quantitative easing.

8x increase over QE is crazy. Is that 8x mortgage bonds or 8x bonds in
general?

~~~
mrep
US treasuries mostly in late march. Demand for dollars skyrocketed due to
covid-19 and people were selling their treasuries to get dollars causing
treasury yields to spike so the FED started buying $75 billion in Treasury
securities per day to supply liquidity to the Treasury market and ended up
buying over $1 trillion in Treasury securities within a short 3-week window.

More analysis about it at
[https://www.lynalden.com/august-2020-newsletter/](https://www.lynalden.com/august-2020-newsletter/)

------
remote_phone
I just refinanced my 30-year fixed mortgage for 2.5%. The rate is utterly
ridiculous now. If we get even a modicum of inflation over the next few years,
I will be paying negative real interest rates.

~~~
peterwwillis
So.... Is it a stupid time to get a mortgage and buy a house, or a fantastic
time?

~~~
sokoloff
It’s a great time to refinance mortgage debt you already have. Whether it’s a
great time to buy a house depends on the future demand for housing in the
local area.

If you pay today’s price for a house in Palo Alto or condo in NYC and those
areas fall in popularity, it could easily be a bad call.

~~~
opportune
Condos in NYC have fallen about 10-20% lately (at least the ones I was looking
at) so even with rising rates I doubt it could go underwater once the pandemic
is over

~~~
sokoloff
It seems quite possible that, depending on the course of the pandemic (short-
term) and a related long-term evolution of remote work in finance/tech, that
the footprint of highly compensated employment and demand for real estate
becomes much more spread out. In a scenario like that, coupled with 8%
mortgage rates, I could easily imagine a 50% haircut to high priced real
estate.

~~~
opportune
That’s true. I’m skeptical we will see high rates any time soon though since
that will hurt the federal government’s solvency big time. And I think there
will always be demand for real estate in trendy cities. But there are
definitely scenarios in which the value further decreases.

------
raverbashing
On a similar note, the developments on commercial real estate loans are
worrying (this has been brought up by discussions of commercial rents with
unrealistic prices)
[https://www.reddit.com/r/nyc/comments/innhah/nearly_twothird...](https://www.reddit.com/r/nyc/comments/innhah/nearly_twothirds_of_new_york_restaurants_may_have/g4ai27m/?context=3)

------
SilasX
@dang should probably link to the main Bloomberg story rather than a shorter,
opinionated site/blog:

[https://www.bloomberg.com/news/articles/2020-09-01/fed-s-
mor...](https://www.bloomberg.com/news/articles/2020-09-01/fed-s-mortgage-
buying-spree-at-1-trillion-with-no-end-in-sight)

------
alex_young
That is interesting, but can someone explain why this is a bad thing?

~~~
vermilingua
IANAE(conomist), but my naive interpretation is this: let’s say the pandemic
causes 25% of mortgage holders to become delinquent, a number I don’t think is
unreasonable. If the Fed owns a third of all mortgages (and their ownership is
a normal distribution of all mortgages, I have no idea if this is true),
that’s 25% of $2T that is suddenly at risk.

If the total Fed balance sheet is $7T, that’s 7% of their total assets that
could disappear. That seems like a lot to me.

~~~
boulos
Actually, your 25% delinquency rate seems unreasonable. During the financial
crisis, the _subprime_ delinquency rate peaked at 26% [1] but the overall
(whole US market) rate was just over 9%.

Delinquency is also mostly just about being a leading predictor of foreclosure
or some sort of renegotiated payment structure. The same stat suggests that
foreclosures overall peaked at just over 2% (but up to 15% subprime) [1 again,
but also 2 which is more clear on 2.23%].

So I’d assume something closer to 2-5% foreclosure, depending on your
estimates of benefits policy. Even in foreclosure, there’s still recovery
(financially).

In fact, Goldman Sachs might even make a profit re-selling the mortgages it
bought off of Fannie / Freddie as part of its $1.8B court-mandated “consumer
relief” program [3]. It’s unlikely the Fed would be as “good” at this as
Goldman, but a likely unwinding strategy would be to sell them to similar
investor groups. Either way, not going to $0 :).

[1] [https://www.statista.com/statistics/205959/us-mortage-
delinq...](https://www.statista.com/statistics/205959/us-mortage-delinquency-
rates-since-1990/)

[2]
[https://www.google.com/amp/s/www.statista.com/chart/amp/1546...](https://www.google.com/amp/s/www.statista.com/chart/amp/15466/state-
of-foreclosure-after-great-recession/)

[3]
[https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/a...](https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/articles/2020-05-26/goldman-
was-just-trying-to-help)

~~~
throwawayhacka
actually, for many metro areas the delinquency rate is reaching 25%+ for FHA
loans right now. they're surviving due to the feds preventing foreclosure.

things are a little better in the other classes of loans but not much! if the
economy stays weak and jobs dont come back, some metros may well see a housing
price decline. Atlanta, Houston and san anton.

~~~
boulos
Sure, but the parent comment was saying they're worried the Fed will lose all
the money. But the Fed is buying things broadly (initially they bought Bond
ETFs/funds!), so while some places will be higher, others will be lower.

My guess is that even more than during the financial crisis, people are
delinquent but would absolutely pay if they could. Was your housing price
decline statement supposed to be about those homes becoming underwater and
therefore the buyers walk away / end up in foreclosure?

------
_nalply
Maybe some people have discovered a money perpetuum mobile: A bank creates
mortgages inflating the collateral then sells them to the Fed. The bank walks
away with a surplus and the Fed explains that they are saving the economy by
bailing out the bank.

------
mensetmanusman
We need massive govt. investment in modular housing manufacturing research
with a standards consortium so that homes can click together with utilities :)

------
olliej
Does the fed get the interest income from those mortgages? Because if it’s not
getting 100% of that interest it’s simply bailing out speculative loans by
banks.

What are the rules for the fed taking on mortgages etc? I would want a max
price of 80% of the value of the mortgage alongside the all proceeds portion
so that banks can’t just make bad loans and then onsell them to tax payers

~~~
JackFr
Taxpayers don’t need to bail out the Fed. The Fed literally creates money ex
nihilo.

~~~
clairity
> "The Fed literally creates money ex nihilo."

that's too simplistic. the fed has wide latitude (probably too wide), but it
should correlate with the (fuzzy, hard to accurately measure/model) productive
capacity/velocity of the (globalized) economy, not just an unlimited well only
constrained by inflation's devaluatory noose.

moreover, considering our technological progress and trajectory, i'd love to
see us revisit the idea that money can only be injected into institutions (via
central banks), which was a limitation of scope imposed by the practicalities
of pre-21st century life. it's also a gatekeeper's gold mine on a no longer
necessary choke point. we should move towards injecting money straight into
the hands that create value, not into those of middlemen like bankers.

~~~
JackFr
I don't disagree with you about the role of the Fed.

But from a practical, tangible, rubber-meets-the-road, this-is-how-they-do-it
point of view when the Fed buys something, it pays for it by writing a new
number in my Fed account. That new number is money.

------
ars
Can the Fed actually make money on all those mortgages?

~~~
somebodythere
The Fed can make (create) money whenever it wants. That is its raison d'être.

------
HashThis
The way crony capitalism theft works is to look for a way to steal. The way to
steal is now clear. Manufacture blow-up mortgages and they blow up on the
mortgage buyers (Fed).

S&L 1980s bailouts were an exact copy of 2008 Mortgage bailouts. Theft in
creating mass blow-up real estate loans. This is a proven crony capitalism way
to steal.

When the Fed has to politically buy them, then crony capitalists will find a
way to get them buying blow-up mortgages in 5 or 10 years.

------
cryptica
By protecting the price of real estate through mortgage purchases, the Fed is
undermining the legitimacy of private property and the concept of private
ownership. This is not going to end well.

------
mgh2
This is actually a good trend. Just compare this to the alternative. San
Francisco and Seattle, where the tech elite overprice the non-tech population,
decimating local communities and worsening the homeless problem. Vancouver and
Irvine, where Chinese elite launder money to buy real state as investments
(and leave them empty) rather than living spaces, resulting in the same
problem.

This all might be a silver lining of the pandemic: combined with remote work,
people are no longer confined to one place - avoiding discrimination of all
sorts (from real state to immigration). The truth is that if the rich are left
unchecked, greed can run rampant and create more harm than good- ex:
healthcare, stock bubbles.

