Congress Solves Housing Crisis by Passing Bill

The House passed a bill to make houses cheaper. Sent it to Trump. Problem solved forever.

The bill targets private equity firms buying homes. Targets them how? Nobody knows. The text probably says something about disclosures and minor tax adjustments that will stop Blackstone the same way a strongly worded letter stops a tank. But the important thing is Congress did something. They held votes. They gave speeches. They convinced themselves this matters.

Homebuyers will now pay lower costs. The bill says so. It aimed at lowering costs right there in the summary. When you aim at something in legislation you hit it every time. That's why the Affordable Care Act made healthcare affordable and the Patriot Act made everyone a patriot. Words in bill titles have legally binding effects on reality itself.

Private equity gets reined in. Reined. Like a horse. Picture a guy in a suit at Apollo Global trying to buy his fourth hundred houses this month when suddenly he feels a gentle tug on his neck. That's the rein. He stops immediately. Goes home. Takes up pottery.

Trump will sign this or he won't. Either way your chart looks the same tomorrow. XHB traded sideways during the vote because the vote does not matter. It will trade sideways after Trump signs it because the signing does not matter. Housing stocks move on rates and rates move on data and data moves on nothing anyone can predict. But sure, let's pretend this bill changes something.

Retail traders already pricing in their down payments. They bought ITB calls yesterday. Read the headline today. Connected the dots. They'll be shocked when their account balance still says insufficient funds in six months and the median home price is higher than it was last year.

The House solved housing the same way my cousin solved his drinking problem by switching to light beer.

Photo by René DeAnda on Unsplash