BiggerPockets Daily How China Could Devastate the American Housing Market
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Apr 14, 2025 The podcast dives into the unsettling impact of China's influence on U.S. mortgage rates. With soaring rates already affecting the housing market, the discussion uncovers how a potential selloff in mortgage-backed securities could cripple recovery efforts. Insights on the bond market's volatility due to political shifts paint a daunting picture. The hosts also tackle the relationship between foreign investments and domestic homebuyers, revealing the intricate dynamics at play in today’s economy.
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Bond Market Instability
- The US Treasury market experienced its worst week since 2019, with bond yields surging.
- This is due to investors' declining confidence in the U.S. economy, triggered by Trump's tariff policies.
Mortgage Rate Risk
- Rising bond yields often lead to increased mortgage rates.
- Foreign investors, notably China, hold a substantial amount of US mortgage-backed securities (MBSs).
China's MBS Sales
- China has started selling its MBS holdings, potentially impacting US mortgage rates.
- If China accelerates these sales due to trade tensions, rates could rise sharply.