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Increased rates in the future will drop purchase prices, but it's likely that it either slows the rate of increase or doesn't drop them to below current prices.
by ryathal 5y ago
Increased rates in the future will drop purchase prices, but it's likely that it either slows the rate of increase or doesn't drop them to below current prices. There aren't many markets even after 2008 that weren't at or above those levels 5 years later. You might get lucky in timing the housing market on a 1-2 year scale, but it won't matter at the 10+ year scale.
- to11mtm 5y agoI hope you're right. As long as home values don't drop -too- much below existing prices, damage would be minimized. Big second order effect of a potential housing crash: There's a non-negligible part of the population that uses their homes as their own lines of credit. As their home increases in value, they occasionally will do a 'cash-out' refiance of their property. Or will open up a HELOC. If the market tanks, people who rely on this tactic will find themselves in a crunch quickly.