4 ms·
Don't worry toooooo much. The total cost of housing moves around less than changes in rates and house prices would suggest. Over time prices, interest rates and
by danielmarkbruce 4y ago
Don't worry toooooo much. The total cost of housing moves around less than changes in rates and house prices would suggest. Over time prices, interest rates and supply tend to move such that people spend, give or take, about the same % of their income on housing.
Right now it sucks in the US because not enough houses were built for a number of years after the financial crises - then that got exacerbated during covid. It's never been easy to buy a house - looking at prices from a generation ago makes it seem easy, but they were facing high teen mortgage rates.
- fartcannon 4y agoWe're about to face teen mortgage rates with million+ homes, aren't we?
- ryanSrich 4y agoAbsolutely. The reason for that is for every person who needs to take out a mortgage for that $1m home, there are 3 buyers that are willing to pay cash, and like 20% over asking price. What many in this thread fail to realize is that there's a larger dynamic to housing right now than anything related to prices and rates. It's purely supply and demand. The demand is just too high for the prices to come down. Having 20% interest rates will curb some of that demand no doubt, but it won't clear it out completely. That means a few dips here and there, but generally, I don't see demand for housing decreasing enough for prices to go down.
- cjbgkagh 4y ago20% interest rates for the US is apocalyptic.
- danielmarkbruce 4y agohttps://www.census.gov/construction/nrc/pdf/newresconst.pdf https://www.census.gov/construction/nrc/pdf/newresconst.pdf Housing starts are trending up. It will take a few years, but supply is coming.
- danielmarkbruce 4y agoThe people sitting around betting on interest rates don't seem to think so.