Depressingly high house prices for the young could at the same time also be depressingly low prices for the old.
Sir, I refer to “What’s really depressing our young men” by Rahm Emanuel Washington Post August 12, 2025. It has to do with the high house prices.
December 18, 2018 you published a letter in which I wrote: “If you want easy financing to help someone afford a house, then house demand and house prices go up, and you need to give even more help to the next person who wants to afford a house. Do we want affordable homes or houses as investment assets? There’s no easy answer, because going back to just homes would also cause immense suffering for all those believing they have, with their houses, built up a safety net.”
When “Tackling homeownership head-on”, Rahm and all other political influencers and decision makers should beware that the above remains just as valid today.
With respect to the financing aspect, you all need to give much more credit to Paul Volcker’s valiant confession in his “Keeping at it” biography: “The assets assigned the lowest risk, for which capital requirements were therefore low or nonexistent, were those that had the most political support: sovereign credits and home mortgages.”
PS. For further references read what ChatGPT and Grok answered when I asked: "If with lower bank capital/equity requirements you make banks hold more residential mortgages than loans to small businesses and entrepreneurs, will not house prices, in the long term, become higher than what the real economy can justify?"
@PerKurowski
Posts
