by Calculated Danger on 1/09/2025 11:44:00 AM
In the present day, within the Calculated Danger Actual Property E-newsletter: Replace: The Housing Bubble and Mortgage Debt as a P.c of GDP
A quick excerpt:
Two years in the past, I wrote The Housing Bubble and Mortgage Debt as a P.c of GDP. Right here is an replace to a few graphs. The underside line stays the identical: There is not going to be cascading value declines on this cycle as a consequence of distressed gross sales.
In a 2005 submit, I included a graph of family mortgage debt as a p.c of GDP. A number of readers requested if I may replace the graph.
First, from February 2005 (20 years in the past!):
The next chart reveals family mortgage debt as a % of GDP. Though mortgage debt has been rising for years, the final 4 years have seen an amazing enhance in debt. Final yr alone mortgage debt elevated near $800 Billion – nearly 7% of GDP. …
Many householders have refinanced their properties, in essence utilizing their properties as an ATM.
It would not take a RE bust to influence the final financial system. Only a slowdown in each quantity (to influence employment) and in costs (to decelerate borrowing) may push the final financial system into recession. An precise bust, particularly with the entire in depth sub-prime lending, may trigger a significant issue.
And a significant issue is what occurred!
There may be way more within the article.
