j.r. leonard

We’re 2 years from full employment in a housing bust driven recession, so lack of a full recovery in housing isn’t that surprising

The scale of the tightening of lending is so huge that it really outweighs the other factors. Consider how odd it is that there is supposedly a housing affordability problem, but sales of new homes under $200,000 is down more than 80% from pre-2006 levels.

The only owner-occupiers that can get mortgages are those who would buy homes worth more than $200,000. There are two different markets today. A functioning high end market and an entry level market mostly now dominated by investors.

Whys the driver? Is it because the entry-level markets are in he places without great jobs?

It’s illegal to lend to entry level buyers

The rental yield on entry level properties is such that if you could afford to rent, you could likely afford to buy. Put differently, if PE finds it worthwhile to own and operate rentals, then owners should too.