4 ms·
Yes, that's enough reason. Higher interest rates makes house affordability even worse. Given that interest rates aren't likely to come down something else has t
by WheelsAtLarge 4y ago
Yes, that's enough reason. Higher interest rates makes house affordability even worse. Given that interest rates aren't likely to come down something else has to give and that's price. Also, once people see prices falling they get scared and are less likely to buy so the prices fall further. Add to that the likely job loss and you have the makings for a housing bust. How deep? No one knows.
Interesting enough, this is what the FED is looking for when they increase interest rates to reduce inflation. They can't control supply but they can reduce demand with higher interest rates.
- Ancalagon 4y agoowners will be less likely to sell if they cant make a profit either, further reducing supply
- whimsicalism 4y agoPlenty of owners will sell a depreciating asset, especially non-resident owners.
- Ancalagon 4y agoOr just rent it out, which is honestly the easier option if you do proper vetting of renters
- whimsicalism 4y agoWell if rental and sale prices track, as they often do, this is also not a great strategy.
- Ancalagon 4y agoRents have increased 15% in 1 year, and landlords are still trying to recoup covid losses. I doubt we will see rents decrease
- whimsicalism 4y agoAs have home prices
- etcet 4y agoalso who wants to sell when they got a 30 year loan at a historically low rate
- harambae 4y agoThere will still be turnover. The elderly won't stop dying just because of their low fixed rate mortgage, for instance.