With record low housing inventory, record low mortgage rates, a Fed committed to ZIRP for the foreseeable future, and a potential permanent increase in working from home, an acceleration of the downward trend in the chart seems inevitable to me.
Will history repeat? Will 2010 to 2027 play out exactly like 1990 to 2007? Will our next financial crisis be another housing bubble disaster? Will the Fed step in to save the economy with even more ZIRP in 2027? Will long-term Treasury yields continue to temporarily scream higher in a futile effort to resist the overwhelming long-term deflationary forces?
Tune in next week for another exciting episode of Soap Bubble!
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