Federal Reserve issues warning over "brewing U.S. housing bubble"

Apr 1 16 Comments

https://www.cbsnews.com/news/housing-bubble-2022-warning-federal-reserve/

Good luck, bulls! You'll need it...

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  • Business Insider
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    Capital One, Anheuser-Busch, Saatchi & Saatchi, Macy's
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    “Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 Global Financial Crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom.”

    From the cited article - https://www.dallasfed.org/research/economics/2022/0329
    Apr 1 4
    • IBM
      yjvY61

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      yjvY61
      "(starting with implying “Federal Reserve” in the title rather than “federal reserve bank of Texas”)."

      You do realize the Federal Reserve consists of 12 regions and the Federal Reserve Bank of Dallas is one of them right?
      Apr 1
    • Business Insider
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      So that’s one of the regional banks that oversee the fed’s privately owned commercial banks.

      There is a difference between a statement issued by the board of governors of the Fed vs one of the regional banking entities.

      Not to say that both don’t carry weight, but there is an implication that “federal reserve” refers to a statement made by the Fed board (like Jerome Powell coming out and making a statement) as opposed to one of the regional banking entities making a statement (which typically apply to regional information about lending to depository institutions, payment services to banks in the region, etc…)

      Not saying it’s fully wrong, but it is misleading (hence “creative liberties”)
      Apr 1
  • Google
    5304

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    5304
    Did they say who caused the bubble?
    Apr 1 2
  • You’re assuming this applies to the Bay Area where disposable income is considerably higher
    Apr 1 2
  • Amazon
    XynDf

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    XynDf
    Clickbait
    Apr 1 0
  • VMware
    fVQL07

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    fVQL07
    You didn’t read the article.

    There is no reason for alarm.
    House price exuberance index overshot 95% price confidence level just now. It became close in 2018.

    Previously it crossed in 1999 and stayed high 8-9 years. Thats ARM loan duration. Then there was a housing crisis.

    Again even Fed notes the housing balance sheet is way better now.

    Why clickbait like that?
    Apr 3 3
    • VMware
      fVQL07

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      fVQL07
      It sounds like you think high inflation and high interest rates have the same effect on housing prices.

      Also all sorts of factors, like supply crunches and surges, job losses, stock markets etc affect housing, but a crash needs more than just throwing a few words around.
      Apr 4
    • OP
      Yep, inflation and rising interest rates have the same effect: less disposable income -> less monthly payment can afford.
      I threw the "words" to watch the trends. It'll be interesting this year.
      Apr 4