25 Years of Real Estate In One Chart

There is good news. This is likely my shortest rant ever.

Freddie Mac recently released the 2013 First Quarter Refinance Report.  My attention was drawn to one chart.  More specifically, the blue line in the chart.

 

 


 

chart refi, LT

Boom and bust in mortgage finance … – via Freddie Mac – click to enlarge.

 


 

It may just be a coincidence but whoever created this chart used the time period that covers exactly the reign of Chairmen Greenspan and Bernanke. Real estate investors should look back and realize that they could not have asked for anyone better than these two.

 

Accommodate, accommodate, accommodate, accommodate ……. that was and is the mantra. It did not matter whether it was the S&L fiasco, 9/11, the sub-prime bubble or the Lehman collapse, the Fed's policy is to accommodate.

All good things must come to an end. Look at that chart. We are about to go off the page. With QE-to-infinity, Bernanke is spent. Each new iteration of accommodation is bringing in less results. What can the next Fed chairman, or maybe chairwoman, do to continue this practice of accommodation? There is little room to lower rates of all maturities. Aside from transferring more and more debt onto the Fed's balance sheet, QE is done in. Not that it has not been lost already, but is there going to be any form of a free market economy left?

Repent, the end is near.

 

p


 

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One Response to “25 Years of Real Estate In One Chart”

  • I stayed out of the mortgage business in recent years because I didn’t want my signature on the 1003’s. Since no one went to jail, or hardly anyone, looks like that was a mistake. Not that I was going to do anything wrong.

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