Housing won’t crash because it’s getting a bailout

1 month ago 3

The bailouts are coming! The bailouts are coming!

Yes, housing’s “no crash” crowd may be right about home pricing avoiding another steep tumble. Those gurus could be proven correct because of my can’t-miss prediction for the 2026 housing market.

The federal government will come to the “rescue” once again.

With affordability ridiculously low for house hunters, you’ll see numerous attempts this year to save housing from the usual free-market fix for a terribly overvalued market: falling prices.

Ponder the current price pain by looking back at monthly payments and how they soared in recent years. My trusty spreadsheet combined monthly median prices, as calculated by Attom, and mortgage rates from Freddie Mac – assuming a 20% down payment.

Nationally, the monthly payment in October was $2,251 for the $360,000 median-priced home. That’s up just 2% in a year.

However, this burden rose 99% over five years and amid pandemic-era economic contractions. It’s up 154% in a decade, when the recovery from Great Recession was in full swing. And it’s 198% higher since 2010.

Yes, payments have basically tripled since just after the last bubble burst. Who got a raise that size?

Statewide, the $4,597 payment for California’s median-priced home of $735,000 in October was flat over a year. But the burden rose 94% in five years, 145% in a decade and 267% since 2010.