David Wessel of Wall Street Journal wrote that housing had bottomed. He is wrong. The housing bulls base their claims on past high water mark metrics which are irrelevant because fundamental structural changes occurred to corrupt the value of those metrics.
During 1984-2009 borrowers used “Easy Qualifier” loans to qualify if they could not otherwise qualify for a loan. Those loans have been outlawed so much of the past data of consumer behavior is not relevant. This means that historical ratios like rent to price or rent to income have fundamentally changed and can’t be used to compare with the …Read More