Pimco's Bill Gross - April commentary

NEW -> Contingent Buyer Assistance Program
Yes, great article!





"<u style="">As past marginal buyers are forced to sell their home to prevent foreclosures, so too will future marginal buyers be restricted from buying them"





</u><strong style="">"This study’s important conclusion for PIMCO and our clients is that if home prices in the U.S. have peaked, and are expected to stay below that peak on a real price basis for the next three years, then the Fed will cut rates and cut them significantly over the next few years in order to revigorate an anemic U.S. economy. Strong global growth (not part of this study’s assumptions) may temper historical parallels and provide a higher floor than would otherwise be the case."</strong>
 
<p>"If mortgage rates don’t come down, home prices need to decline by 20% in order to reach prior affordability levels. If rates do come down, home prices will drop less."</p>

<p>Ah but what if rates go up? Considering rates are up 20 bps since the beginning of March. His chart doesn't address rising rates so his doomsday scenario isn't as gloomy and doomy as it could be. </p>
 
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