I argue workers are more likely to continue to pay their mortgages, in a strong enough labor market supported by structural demographics where almost 6M workers are leaving the US labor force every year through retirement or death, versus US fiscal policy. Housing supply is low, with millions of units of shortage, that will last for at least into the next decade. Mortgage backed securities are also backed by the federal government in the same way US treasuries are. So, why invest in treasuries?

The 2008 real estate bubble and collapse is very unlikely to happen again in the next decade or two, due to the above factors. There simply isn't enough real estate inventory to acquire, nor enough labor supply to build excess. Foreclosures will be flipped back onto the market at market prices, minimizing any potential MBS investor losses.

An exercise in thinking about the unthinkable: a U.S. debt default - https://www.axios.com/2026/09/08/treasury-default-class-exer... - September 8th, 2026