[toomuchtodo]

Lots of slowing left to go. Note the rapid rise in the index after the pandemic [1]. The Fed misstepped pretty badly, in hindsight, by lowering rates near zero and buying up mortgage backed securities at the volume they did to support the capital markets when uncertainty was high. This has led to a painful macro situation where this excess aggregate real estate equity has to be burned off over time, through a combination of higher for longer interest rates and demand destruction. It’s from a combination of artificially low interest rates and mortgage rates from during the pandemic along with 30 year fixed rate mortgage duration, like a balloon that was squeezed from cheap capital market debt into real estate asset ownership. And so the unwinding continues.

[1] https://fred.stlouisfed.org/series/BOXRSA

(housing shortage doesn’t help, but you can only build so fast)