summary of housing market fundamentals:
1. majority demographic (boomers) need stable—at worst—or increasing home valuations. this is a retirement dependency and is non-negotiable.
2. future majority demographics (millennials, z) need lower valuations. this is a family/future-building dependency and is non-negotiable.
3. political cycle is based on the next election (2 years max) so the future demographics are ignored in favor of the status quo.
4. the fed owns multiple trillions in MBS as a result of 1. and 3., this is the primary factor in the market pricing of residential property.
this leaves government the following options: legislate supply increase to bring valuations down, fight the fed to bring valuations down through reduction of MBS on their balance sheet, do nothing, or actively encourage high valuations by seeking lower rates from the fed and legislating regulations on housing starts (we are here).
thus we can reasonably conclude that 1., 3., and 4., far outweigh 2.
feel free to ask me what you should do about that if you are a younger person, but hopefully you already know my answer if you are reading this (spoiler: hoard some fucking bitcoin)
