What I’m Reading
Holding the Bag: The Federal Reserve now owns $2.72 trillion in mortgage backed securities, up from $1.4 trillion in 2020. It has announced the intent to shrink that amount substantially in order to help tighten monetary policy. However, most of those loans are at much lower rates than today, meaning that the percentage that will repay due to refinance or sale will drop dramatically from historical norms. The only other way out would be to sell the MBS holdings at a substantial discount but that hardly seems viable either economically or politically. As a result, the Fed is likely to undershoot their top end goal of $35 billion a month in mortgage portfolio reduction. (h/t Steve Sims) Axios
Nowhere to Go: There are now more Airbnb listings in NYC than apartments available for rent according to data collected by AirDNA and Inside Airbnb. Curbed
On the Move: New research from the National Bureau of Economic Research found that the shift to remote work was responsible for over one half of the 23.8 percent national house price increase since late 2019. NBER
Back to School: In the longer term, college towns are better positioned to benefit from the remote work boom than vacation destinations thanks to better amenities, generally lower housing costs and more diverse workforces. Bloomberg
Zooming: Gen Z is poised to surpass Millennials as the largest renter cohort in the coming years, reaching parity by 2025. With a somewhat smaller generation taking over, this likely means somewhat slower growth in household formation over the next decade or so. However, affordability issues also mean that renting is likely to capture a larger share of new households. Globe Street
Chart of the Day
Apartment renter incomes are still soaring across the board.
Source: RealPage
WTF
Getaway Car: A woman attempted to flee a traffic stop, hit multiple police cars and then threw a rubber snake at officers because Florida. NBC 5
Monkey Business: A man in an ape mask was arrested after busting laundromat coin machine with a sledgehammer because Florida. Tampa Free Press
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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