US housing market soars as loans reach new records

And you think Australian property is booming? The US is having another mammoth surge in property values, helped along by debt of course. From the WSJ:

Mortgage lenders issued $1.61 trillion in purchase loans in 2021, up from $1.48 trillion in loans issued in 2020 and marking the highest mortgage borrowing numbers ever recorded.

The 2021 figures exceeded a previous record set in 2005, when $1.51 trillion in loans were issued.

Home prices went up by 18.4 percent in October, marking a slight drop from when home prices were up by 19.1 percent in September.

Home prices in the U.S. rose by 18.4 percent in October, according to the data from the S&P Dow Jones CoreLogic Case-Shiller 20-City Composite Home Price NSA Index released on Tuesday.

This growth in home prices marked a slight drop from the 19.1 percent increase that was reported in September.

But with a strong labor market, Americans who have obtained pay raises or saved during the pandemic are potentially prepared to step into the housing market despite the soaring costs.

The Bureau of Labor Statistics reported that wages for all private-sector workers increased by 4.6 percent year over year in the third quarter, the Journal noted.

“All of that extra income goes somewhere, and a lot of it went into housing,” Taylor Marr, deputy chief economist at Redfin Corp., a real-estate brokerage, told the newspaper.


Luckily there’s only three rate rises on the way for mortgagees this year in the US….

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  1. Luckily there’s only three rate rises on the way for mortgagees this year in the US….
    Brilliant. Except nearly all mortgages there are fixed rate.

    • Jumping jack flash

      It doesn’t really matter. In fact that’s even better. Its the symbolism of the interest rate rise that’s important.

  2. Jumping jack flash


    Government stimulus-induced inflation leading to higher wages, leading to more debt, leading to more consumption, inflation, wages, and more debt. All is as it should be and all is going as planned. Thanks, COVID, and thanks COVID stimulus done right!

    Then after wages rise enough, the tiniest of tiny rate rises can occur and the debt economy will not be utterly destroyed as a result.

    Then when the interest rates rise by the smallest amounts imaginable and everything remains running, more or less, the Fed borrows the “Mission Accomplished” banner, strikes up the band, and their dubious use of interest rate manipulation to heal the economy will be a success! Keynesianism works! Greenspan is vindicated! Take that, Austrians!

  3. How does the latest house price increase & debt growth/levels compare to the period 2005 to 2007?
    Is this the trickle down method of assisting the plebs? Hand out lots of dosh to Banks & they get it to plebs via buckets & buckets of debt? Surely nothing could go wrong.

    • Jumping jack flash

      It’ll be fiiiine, as long as they dont panic at a little bit of inflation like they did in 2007.

      Robust inflation is the basis of the entire system working correctly.

      The alternative is “baseload” export manufacturing to earn national income to pay for everything, but that’s all been outsourced and it makes no sense for the private sector to do it anymore. The real money is in services, retailing imported items, and using debt to pay for it, and growing the debt pile to simulate economic growth.

      Consider the stark differences between the amount of debt we all own, the value of our houses, and the amount of income we receive from exporting dirt – to exemplify the case of Aus, the rest of the developed world isn’t too different, in fact its probably worse.