How Fixing the Housing Crisis Could Trigger Devastating 10% Treasury Yields - streamlinefeed.co.ke
How Fixing the Housing Crisis Could Trigger Devastating 10% Treasury Yields - streamlinefeed.co.ke
Source: streamlinefeed.co.ke
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DW NOTE
The theory works like this: Build more housing, reduce rents, suppress shelter inflation, let the Fed cut rates, push bond yields down. Except housing construction requires materials shipped through chokepoints, labour paid at prevailing wages, and permits issued by municipalities that still collect property tax. Add contractor margins, land cost escalation, and regulatory delay, and new supply comes online slower and pricier than the model assumes. Meanwhile, if you actually do flood the market with units, you collapse collateral values for the $12 trillion in mortgage-backed securities that anchor institutional portfolios — which is why Treasury yields spike, not fall. The crisis isn't a supply problem you can build through; it's a debt problem you've built into the foundation.