The Federal Reserve-induced Echo Housing Bubble is finally starting to roll over, and the bubble's pop won't be pretty. Why is the bubble finally popping now?
All the factors that inflated the Echo Housing bubble are running dry. These include:
— unprecedented low mortgage rates
— FHA mortgage approvals for anyone who fogs a mirror
— frantic cash buying by Chinese millionaires desperate to get their money out of China
— the Federal Reserve buying up trillions of dollars in mortgages
— lemming-like buying of housing for rentals by everyone from Mom and Pop to huge hedge funds.
The well's gone dry, folks. There isn't going to be another push higher or a third housing bubble after this one pops.
Let's start with the basics: demographic demand for housing and the price of housing.