>>18742601
>>18742744
I used to think that housing prices would crash again after the reflation of the housing bubble but there's a very real risk that housing prices will never fall again in nominal terms. Sadly, the US has become more like China rather than the other way around and one of the key differences in shitty countries like China versus the US historically is that the Chinese money is never trustworthy and there is practically a unanimous, unthinking belief that real estate can *never* go down.
While I believe that every bubble does indeed pop, I think it should be pretty clear that the Fed will stop at nothing to keep all of its bubbles--stock, bonds, real estate--inflated. The popping of the Fed's bubbles, however, may not be manifested in housing prices. The real estate bubble is at the heart of the Fed's failed policies and future policy actions. The problem is that if real estate is allowed to fall, the creditors, who control the Fed, are going to take a bath. After seeing the more and more outrageous bailouts over the past two decades, does anything think the creditors are going to take a loss now?
There are two ways the creditors can lose money on mortgage debt: 1. Housing prices fall and debtors start defaulting en masse, which causes the debt instrument behind the mortgage to fall in price. 2. If interest rates rise either due to Fed desire to normalize interest rates (hah!) or due to some other reason such as high inflation or as compensation for default risk, the debt instruments will fall in price even if there are zero defaults. But higher rates, at the very least, will cause strategic defaults if not more typical defaults because higher interest rates for mortgages cause housing prices to fall which will put debtors upside-down on their mortgages as buyers will not be able to borrow as much money.