5 ms·
Do you have any evidence that #1 would actually happen, if interest rates rise? I was listening to a podcast a while ago where an economist was discussing that
by deanmoriarty 5y ago
Do you have any evidence that #1 would actually happen, if interest rates rise?
I was listening to a podcast a while ago where an economist was discussing that if we go back in history and look at the times when interest rates rose, rarely/never we find that housing prices actually went down. They counterintuitively stayed flat or continued to rise (in the US).
- AnimalMuppet 5y agoDepends on how stringent of evidence you want. Supply and demand in housing doesn't work on the purchase price. It works on the monthly payment (and the down payment), because that's the limiting factor for most buyers. If interest rates rise, the monthly payments rise for the same total house price. So fewer buyers can pay those prices. The demand curve shifts, so the price point shifts. I saw this with our first house. We paid $61K, at 9% interest. Two years later, interest dropped to 7%, and our house was worth $90K. If we had bought the same house two years later, our monthly payment would have been the same. Yeah, I know, that's anecdote, not data...
- ipaddr 5y agoThose account for first time buyers only with the min down payment.