Today, I was interviewed by Bloomberg Financial to give my take on the mortgage market meltdown that has gone on recently. For those who follow me on Twitter, you know, on March 14th, I performed a twitter live calling it a Mortgage Margin Call Meltdown.
However, one thing that I need to make clear. Unlike in 2008, where the entire banking industry was at credit freeze risk. This time the credit freezing hasn’t impacted the mortgage market in the same way. Some of the Niche mortgage players have been taken out, though.
One of the most common questions I have gotten recently has been what will happen to home prices. I addressed this in my recent article on HousingWire.
In these unprecedented times, I find myself reflecting on Rod Serling’s Twilight Zone monologue on travel into an uncharted dimension, “Beyond that which is known to man…It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge.”
We are indeed in a land somewhere between science and superstition, between our fears and the inadequate summit of our current knowledge.
When I am faced with navigating unfamiliar terrain, I tend to fall back on the tried and true method of setting bearings, establishing anchor points in the current environment then projecting a course based on personal experience and/or historical references.
As a thought experiment, I applied this approach to making predictions regarding the effect of the coronavirus pandemic on U.S. home prices.
My working hypothesis for this experiment, to be proven or disproven, is this: One of the economic consequences of COVID-19 will be the collapse of U.S. home prices.
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.