I haven’t had a post like this in a minute but something has been on my mind. I still work really hard in the housing world and have a passion for making things affordable. After talking to many bankers, realtors, builders, and home buyers I think we are on the verge of a major crisis. Not in bad purchases or consumer fault but 100% in government oversight and corporate greed. Our housing market will crash and when it does it will show an equity disparity like no other before. Right now those who can’t afford the insane prices of houses ie: everyone are taking out 2nd and 3rd loans to help with closing costs and downpayment. This is causing further equity disparity in the fact that those who are buying are using larger and larger loans. Instead of using their own cash. Meaning if the market crashes and your $400k home becomes a $200k home you now owe the bank $200k on a loan now not attached to a valued asset, your house. This equity share will be so great that we will see a crash with no consumer money in the market similar to 2008. A crisis that could be avoided by steading interest rates and lowering highly overvalued homes. This won’t happen though and we will be doomed. Just a thought.
Housed and Fed 