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Date Posted: 10:35:58 4/18/23 Tue
Author: Jasper
Subject: Here is an article from Charles Smith on just that mortgage rate scenario.

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Meanwhile, those with 3% mortgages are trapped in their current homes which are effectively off the market, and would-be young homeowners face the unaffordable combination of bubble-valuations and high mortgages rates. As I concluded in my previous commentary on the housing bubble (This Housing Bubble Is Different: It's Much More Precarious), Distortions eventually have consequences. Concentrate wealth and income in the top 5% and corporations, and give the already-wealthy abundant low-cost credit to concentrate ownership of assets, and you get a distorted economy in which the older and wealthier have outpriced the young.

Who's left to buy overvalued houses? Too few to prop up bubble valuations. This Fed-engineered generational wealth-opportunity inequality will generate more than a phantom "wealth effect"--it will also generate second-order effects of social fragmentation and the erosion of the social contract that the Fed is powerless to repair.

https://www.oftwominds.com/blog.html#jump

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