Small-town America was left behind

The industrial midwest did not participate in the growth of the last 40 years.

Once in a while, I wonder what life would have been like if I stayed in my small hometown in Wisconsin. Members of my extended family and friends from school still live there, and I generally visit every year, so I ...

Small-town America was left behind

House prices may never reach the inflation-adjusted peak from 2006

House prices exceeded the 2006 housing bubble peak in 2016, but when adjusted for inflation, house prices may never reach that benchmark.

The NASDAQ recently surpassed the tech bubble high from 2000. Anyone who bought the index in March of 2000 could finally sell their holdings without losing...

House prices may never reach the inflation-adjusted peak from 2006

California creates many jobs but builds few houses

California creates more jobs than houses, so people leave the state for cheaper housing.

In the early 1970s, California began restricting new development. At first, it wasn’t a problem, but when California voters later passed Proposition 13, they made residential real estate much less...

California creates many jobs but builds few houses

Potential homebuyers respond negatively to higher mortgage rates

About 25% of potential homebuyers react with foolish urgency, but nearly half respond by either substituting down in quality, delaying their purchase, or canceling it altogether.

The national association of realtors is notorious for spinning data to support a false narrative the instills...

Potential homebuyers respond negatively to higher mortgage rates

Subprime loans are a government subsidized entitlement

Should everyone really own a house? Are renters so much less a part of their communities that the government must spend billions of dollars subsidizing home ownership?
These are important questions. How we answer them will guide how we remake our housing finance system which was destroyed with...

Subprime loans are a government subsidized entitlement

An entire generation of homebuyers went missing

The housing bubble pulled forward a generation of buyers; the housing bust cost these buyers their homes and their good credit, removing many of them permanently from the housing market.

Lenders succeeded in manipulating market prices by restricting supply; however, for a true recovery in...

An entire generation of homebuyers went missing

Removing distressed house supply facilitated the economic recovery

Removing the supply of distressed homes created a supply shortage homebuilders responded to by providing more houses, hiring construction workers, and stimulating the economy.


If I understand Keynesian theory properly — which is important to understand federal reserve policy — inflating asset v...

Removing distressed house supply facilitated the economic recovery

The two main reasons higher interest rates will hurt housing

Higher interest rates reduce housing demand by causing mortgage applications to decline, reducing loan balances, harming employment, and suppressing wages.

The federal reserve establishes interest rate policy, and for six years, the federal reserve held the benchmark federal funds rate to zero...

The two main reasons higher interest rates will hurt housing

Should fear of a housing bust prevent people from buying homes?

Rather than react with excitement and increased urgency, potential homebuyers fear rapidly rising home prices signal a new housing bubble. Does it?

California endured three large housing bubbles since the early 1970s. Each one was kicked off by a huge house price rally, inflating prices well...

Should fear of a housing bust prevent people from buying homes?

Can lenders loosen credit standards without inflating another housing bubble?

Lenders lower standards to qualify more borrowers and increase business, a precursor to another bubble, but only if risk is again mispriced.

The recipe for a housing bubble includes many ingredients such as loose lending standards. However, loose standards merely qualify more borrowers. While ...

Can lenders loosen credit standards without inflating another housing bubble?

Homebuilders love Donald Trump

Homebuilder confidence rose the most on record last month entirely due to the election of Donald Trump.

I spent most of the last four months meeting with homebuilders. The people in my office spend most of their time dealing with homebuilders. As a group, we interact with all of them, so we ...

Homebuilders love Donald Trump

California legislators want solar panels far more than they want houses

Forcing communities to accept housing like we force them to accept solar panels could solve California’s housing crisis.

Actions speak louder than words. Politicians pontificate on many issues, and they pander to their constituents to gain reelection. However, the laws they pass reflect...

California legislators want solar panels far more than they want houses