Investor Peter Boquard is sounding the alarm over the Fed-triggered housing bubble. COVID-19 pandemic politicians.
He warns that first-time home buyers are most vulnerable to serious losses.
“I feel sorry for the people who bought houses last year because they paid very high prices,” Bleakley Advisory Group’s chief investment officer told CNBC.Trade nation” on Thursday.
It singles out those who bet 5% amid historically low mortgage rates. If house prices rise by 10%, Bouquard will see a world of pain.
“Their capital has been almost completely destroyed,” he said. “For those who have owned and accumulated capital for a while, they will be much more isolated.”
His warning came as the Fed’s policymakers met for virtually annual symposium at Jackson Hole…
Primer, who followed inflation in mid-2020, was criticize the Fed’s policies during the pandemic… He notes that by supporting unprecedented quantitative easing through the economic recovery, the central bank has caused a surge in housing demand that has exceeded supply. The result is skyrocketing prices.
“The problem is that he was driving demand so high that supply couldn’t keep up – whether it was builders who couldn’t get materials, or couldn’t find labor, or couldn’t find enough plots,” said Boquvar, a CNBC contributor. …
With housing being the most interest-rate-sensitive part of the US economy, Boquvar fears the consequences will be far-reaching.
“This is very frustrating for the buyer – especially the buyer who wants to own a home for the first time, who is now lowering the price and then in turn rents it out,” Boquvar said. “But rental prices are also skyrocketing.”
He suggests there is evidence that air is exiting the bubble.
“People are now seeing the shock in housing prices and are retreating,” Boquvar added. “Buyers are calling a timeout. They said, “I can’t afford it,” or “I want to wait for house prices to go down.”
Wall Street May Clarify The Housing Market Next Week With pending sale of existing homes, the FHFA house price index and Case-Schiller S&P CoreLogic results. He expects the data, which will reflect the trends from the beginning of this summer, to be strong.
“We will continue to see double-digit growth in house prices,” said Primer. “There is still not enough inventory.”