Is This a Housing Bubble?

📙 IS THIS A HOUSING BUBBLE?

Michael Batnick | The Irrelevant Investor

High prices are necessary but not sufficient in order for something to be a bubble. You need speculation. You need euphoria. You need perception to be completely dislocated from reality. That’s not what’s happening now with the housing market. Prices are what they are for two structural reasons:

1. People are trapped in their house due to the gap between rates today and rates they locked in.
2. This is keeping supply low, and when you couple that with the other structural reason, 84 millennials who need a house, you get a nasty recipe for a completely broken housing market.

Before the Fed started raising rates in March 2022, mortgage rates were at an all-time low, and single-family home prices were at record highs. Now mortgage rates are screaming above 7%, higher than the average rate of ~6% since 1990. (The gray line is rates since the fed started raising rates in March 2022) … Click here to read more.

🎧 THE NEW WAY WE THINK ABOUT MONEY

Morgan Housel | The Oddlots Podcast

When generations undergo any kind of collective life-changing event, it shapes how people think about money — and how they think about spending and investing. Past upheavals like the Great Depression, the World Wars, the inflation of the 1970s, and Weimar-era hyperinflation, had profound effects on the cohorts that lived through them. So what will be the effect of the pandemic on current generations?

Click here to listen.

Have a great weekend!