Rising mortgage interest rates will slow home price appreciation

Higher mortgage interest rates will reduce future loan balances; thus today’s homeowners will not experience the home price appreciation enjoyed by previous generations.

Many would-be homeowners rush to the market to lock in low mortgage rates out of fear of being priced out forever. Nervous b...

Rising mortgage interest rates will slow home price appreciation

Chinese government decree prohibits investment in foreign real estate

State Administration of Foreign Exchange requires all buyers of foreign exchange to sign a pledge that they won’t use their $50,000 quotas for offshore property investment.


It’s really happening. The outflow of capital from China prompted the decree to stop Chinese Nationals from i...

Chinese government decree prohibits investment in foreign real estate

Top ten ways to protect taxpayers against future mortgage bailouts

More than eight years after the government took over mortgage finance, the US taxpayer still insures the bulk of the loans in the housing market.

Prior to the collapse of the housing bubble, when lenders foolishly loaned money to people operating personal Ponzi schemes, it was theirs to give — a...

Top ten ways to protect taxpayers against future mortgage bailouts

Expect low for-sale house inventory for many more years

For the missing MLS inventory to return to the market, borrowers need debt forgiveness, and house prices need to move even higher.

I advise buyers to be sure they plan to live in the same place for at least two or three years for prices to rise high enough for them to sell and cover the sales...

Expect low for-sale house inventory for many more years

Raising California"s minimum wage won"t help workers much

Competition for limited housing stock will prompt low-income workers to allocate any pay raises to securing better housing, enriching landlords.

Advocates for raising the minimum wage aspire to help. Many working-class Americans barely subsist earning minimum wage — and some only survive living ...

Raising California"s minimum wage won"t help workers much

Did Trump raise the FHA insurance premium to screw California?

Higher FHA mortgage fees hurt real estate markets most in areas that did not vote for Donald Trump.


In one of his first acts as President of the United States, Donald Trump suspended the lowing of FHA mortgage insurance premiums scheduled by outgoing president Obama. If Trump had done nothing,...

Did Trump raise the FHA insurance premium to screw California?

Rising mortgage interest rates repel first-time homebuyers

Rising mortgage interest rates caused an alarming 10% decline in potential first-time homebuyers.

Over the last several years, most pundits predicted mortgage interest rates would rise. With the exception of the taper tantrum, a 1% rise in mortgage rates during a six-week period in mid-2013, ...

Rising mortgage interest rates repel first-time homebuyers

Federal Reserve"s Dudley predicts return of HELOC abuse

The Federal Reserve’s Dudley believes people will forget the lessons of the housing mania and return to profligate home equity spending.

When people lose money (or foolishly waste it), they often behave differently after the incident. Wise people actually take action to prevent a ...

Federal Reserve"s Dudley predicts return of HELOC abuse

The weak case for occupancy after foreclosure

Some progressives want people to occupy houses they don’t own and don’t pay for.

It’s sad when someone is forcibly evicted from their family home. People develop strong emotional attachments to real property, so many people feel compassion and empathy for those enduring such a d...

The weak case for occupancy after foreclosure

Yesterday"s Baby Boomers were better off than today"s Millennials

Millennials are worse off than Baby Boomers were at this stage in their life cycle.

Growing up in the Midwest, I remember the relative prosperity of ordinary families in the 1960s and 1970s. Working-class families supported themselves on union labor contracts granting them a high quality of...

Yesterday"s Baby Boomers were better off than today"s Millennials

Can unrealistic beliefs about appreciation cause a housing bubble?

It takes more than a manic desire to inflate a bubble. The ability to deliver capital to the market is also an essential element.

Many people who believe in the wisdom of the markets subscribe to the efficient markets theory. It postulates that market participants have equal access to good ...

Can unrealistic beliefs about appreciation cause a housing bubble?

The final frontier for land speculators: the moon

We running out of land! Buy now or be priced out forever! We’re even running out of land on the moon!

Most participants in financial manias share a common belief in the scarcity some precious resource. The notion that we’re “running out of land” sparked several financial man...

The final frontier for land speculators: the moon

How renters should prepare for homeownership.

Rent a property using 23% or less of your gross income and save 8%. This prepares you for a 31% debt-to-income payment and provides a quality of rental you could later buy.

I never embraced the innovations in real estate finance that inflated the housing bubble. I never considered any financing...

How renters should prepare for homeownership.

Home sales likely to fall in 2017

High house prices and rising mortgage rates will hurt affordability and offset any gains from wage growth and an improving economy.


Have you looked for a home to buy lately? They’re expensive, and although 4% mortgage rates enable buyers to finance those prices, mortgage rates only ...

Home sales likely to fall in 2017

Bold California housing market predictions for 2017

The housing market will flourish or flounder depending on mortgage interest rates.

For each of the last three years, I made a series of bold predictions for the upcoming year. You can judge for yourself how I did:
Bold California housing market predictions for 2014
Bold California housing...

Bold California housing market predictions for 2017

Would you surrender future equity gains for a lower house payment?

Investors will supplement down payments in exchange for a share of future profits. Would you make a deal like that?

Are there any circumstances under which homebuyers would be willing to share in the upside of home price appreciation? Would you sell an option worth 35% of the upside in exchange...

Would you surrender future equity gains for a lower house payment?

How rising mortgage rates erode homeowner equity

One man’s mortgage debt is an entire neighborhood’s equity. Higher mortgage rates put pressure on the size of mortgage balances, potentially eroding homeowner equity.

When a buyer purchases a house, their purchase sets a standard by which the value of other houses is inferred. When a house sel...

How rising mortgage rates erode homeowner equity

Should free shelter be a basic entitlement?

During the housing bust, every effort was made to keep homeowners in their houses. Renters were mercilessly thrown in the street with little or no fanfare.

Our real property system functioned well for centuries with very little change. Prior to the housing bubble, it was widely accepted that...

Should free shelter be a basic entitlement?

Are bad housing solutions better than no solution at all?

Any legislation or policy that promotes housing production is better than producing no housing at all.

In the post, Will building more roads and houses merely increase demand?, I lamented that nimbys managed to turn the solution into part of the problem. They embrace the idea of “induced ...

Are bad housing solutions better than no solution at all?

Don’t worry about rising home prices and rising rates

Dodd-Frank should prevent house prices from rising so high that only fools and millionaires can afford them.

When house prices rise rapidly and mortgage rates go up, the cost of ownership rises even more rapidly, and realtors stoke fears with “buy now or be priced out forever.” Under these cir...

Don’t worry about rising home prices and rising rates

Will building more roads and houses merely increase demand?

Social scientists contend providing more roads and houses leads to “induced demand” and fails to alleviate shortages.

The recent presidential election illuminated the problem of confirmation bias, particularly when emotional, political issues are involved. We all want to believe we...

Will building more roads and houses merely increase demand?

43% Debt-to-income cap strongly favors borrowers with no consumer debt

With no rigid cap on front-end DTIs, those with no consumer debt could borrow more to finance a home purchase.

It’s no secret that I don’t think consumer debt is a good idea (See: Think you want consumer debt? Think again…) With the ongoing war on savers waged by the federal reserve, it’s been a...

43% Debt-to-income cap strongly favors borrowers with no consumer debt