The Fed Broke Home Prices & Now We All Have To Pay | Amy Nixon

Record-low interest rates & central bank stimulus resulting in a record decade for housing price gains leading up to 2021.

But then the Fed and many other central banks reversed policy. Interest rates have rocketed higher and the stimulus spigots have turned off. Mortgages are now more than twice as expensive than they were two years ago.

As home prices are now weakening nationwide -- and globally, too -- homeowners around the world are asking: if a correction is now in process, how bad will it get?

To help us better understand the key dynamics in play, Amy Nixon returns to the program. She appeared on this channel several months ago to warn of us the brewing trouble in the short-term rental market, which she coined the "AirBnBust" -- a warning that quickly proved prophetic.

If we have time, I'll ask her for an update on that unfolding correction, as well.
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#housingmarket #fed #homeprices
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[kimcamping]

Please have Amy back. I appreciate her insights into the housing market, including Airbnb. Thank you!

[RPSartre]

The FED broke home prices long time ago when that dip$hit Greenspan took interest rates to zero to inflate and create a housing bubble. That's when we really started to pay! I frankly hope the FED busts these crazy prices.

[sunbugg]

Amy is fantastic, I love her style of communicating her knowledge and experience. This was a great interview today. Let’s have her back.

[balboacottage]

Hi Adam,
Amy Nixon is honest, genuine and very knowledgeable regarding Real Estate market. Thank you for having her as a guest.

[jimroyer]

I was a stock broker outside Denver back in 2001 prior to 9/11. After 9/11 the stock market went down 50% and you couldn't give away a stock. I kept on hearing, "I'm putting my money into real estate since it never goes down". Well after 9/11 and thousands of layoffs in the telecom industry, every third house was for sale. Housing prices were so high you had to have two incomes to pay the mortgage. In addition, my brother was hit by the oil bust in Texas back in the 80s. His home price dropped by a third! Shame on the Gov't for meddling in zero interest rates, making easy money available to almost anybody who wanted to own a home. Good analogy to how the Gov't created the student debt fiasco.

[elizabethblane]

"If you can afford the payment . . . " That's the whole thing. They can't.

[massonh]

AMY is a fantastic guest!

Clearly someone who has an extreme amount of knowledge in her field. 👏👌

[RobWilliams]

Not just companies doing it, groups of individuals got together to buy property.

[Tnkcommander]

Was very impressed with Amy's last interview....this one is even better! I especially appreciated her comments around 16:15 as they directly apply to me. I've been predicting this crash since early 2022 - with much the same logic as Amy and Stephanie - but despite the [historically rapid] price decreases it is pretty demoralizing with house prices being so far out of reach, even making well over double the median income of my area.

Definitely make sure Amy stays in the regular rotation! And congrats on continually getting so many superb guests, and hosting them so well!

[ireneaustin]

Prices rose 300% here in North Texas in the last 3 years., now they want us to buy 300% inflated prices with mortgage rate doubled as well. I will live in a tent before I do that

[jimmalloy]

As a mortgage broker, I find it incredibly hard to believe 24% of existing loans are "variable." To begin with, not to be too technical, but it seems you're conflating adjustable with variable. Variable means Home Equity Lines of Credit, generally, that change when the prime rate changes and they are almost always second mortgages. Adjustable loans adjust on a schedule during their adjustable period, usually every six months or once a year, but it's important to remember that they're usually fixed for the first three, five, seven, or ten years. So most of these are still in their fixed periods and stable. But the vast, vast, vast amount of people, like "everyone" refinanced with fixed-rate mortgages in the last couple of years. The 24% figure seems wildly inaccurate or misleading because of your conflation, it seems to me.

[themeatjesus]

Amy is one of my favorite guests next to Michael Green. Very 'head on their shoulders' kind of people. I like Amy's point that we probably overlook: the Fed doesn't play by free market rules and so the housing market doesn't have to either to a point. We never really saw where the housing bottom was in the last crash.

[johnnylogan]

Experience is a tough teacher. She always gives the test before the lesson.

[nickhouge]

Long time listener and hopefully future homebuyer here. Thanks for the great free content you put out Adam! Thanks for bringing Amy on your channel again. I have seen lots of smaller flippers talk and promote “creative financing” if more people end up taking over peoples existing mortgages at these 3% rates could this home price correction be kicked down the road much further than we think if the current homeowners fall into financial trouble or job losses ext? Also with federal and government agencies creating programs such as mortgage forbearance during the pandemic, what’s to stop them from allowing this to happen again if we ever go into economic turmoil thus never allowing housing to be marketed adjusted ever again?

[omnimoeish]

I think it’s funny when people say home owners aren’t selling due to some solidarity to keep prices up. Hint: they can’t afford to sell and buy another house with double the interest rate.

[randallolgers]

Hi Adam, super discussion with Amy. One thing that was not discussed enough that I think is important and worthy of mention is the rise of 2 income households. In my experience, most of the benefit of having a second income has been thrown back into property, either by buying a bigger home, renovating or facilitating the purchase of an investment property or two. Basically even more money going into property and pushing prices up to the detriment of younger generations, single income households and even double income households at lower income levels. Keep up the great work!

[makeyourlifeeasier]

Only Adam can reference Wile E Coyote ...and make it make perfect sense! Kudos! Good interview and guest.

[jeffreymorgan]

Yes, Bring Amy back again. Good info

[denniswright]

Amy is a bright lady. Thanks, I enjoyed her input. Learned not to use AirBnB. I'll stick with the hotel.

[orwhat]

You can only front run the pivot if there is a pivot and if prices don’t fall. You can’t refinance very easily if your appraisal is 25% below your loan balance.

I understand there is huge cash in the institutional system waiting for events to become clear.

Great point about pricing at the margin, Adam.