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Originally Posted by bobman0330
Here's a blog post about a paper that argues that the housing bubble is largely a fiction.
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We legally removed access to funding for a broad section of the market. That's a structural shock that changes the price level.
This sounds similar to how people were suggesting the Republican tax bill, through lowering the mortgage deduction, would hurt home values, yeah?
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Two-thirds of lending to FICO scores under 720 disappeared and more than half of lending in the 720-760 range disappeared. Above 760, originations continued roughly as they had before. To give you an idea of the scale, 2/3 of households are homeowners and the average US FICO score has been around 690 for the entire time.
What's the cause of this? Fannie and Freddie going down? Banks realizing how much they **** the bed?