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I think the rates increases are putting pressure on the housing market, but what I'm curious about is how this affects housing prices in context. If rents are v

I think the rates increases are putting pressure on the housing market, but what I'm curious about is how this affects housing prices in context. If rents are very high (as they are), and high interest rates cause builders to build fewer homes and/or only build higher margin homes (McMansions and such) at higher price points, what is going to happen? Are people just going to be trapped with high rent and never escape to buy a home? Or are interest rates going to rise but prices will also either stabilize or rise?

AmVess 4y ago
High rents in many places. The cost of homes going up because of lack of supply and now because of mortgage rates. Where I used to live the cost of starter homes has gone through the roof, and there's tight supply. I rented them out for $1k-ish and now rents are double that...all in about 5 years. Add in landlord unfriendly policies, and rents go up even more. In some areas, these policies are driving out individual landlords, leaving only institutional investors who look for any excuse to raise rents. Rents are expensive now with no end of increases in sight.
crooked-v 4y ago
I personally expect increasingly desperate attempts by state and city governments to do literally anything except actually allow enough housing to be built. I don't know where that will lead, but favelas and multigenerational inherites rent contol contracts seem likely.
- ericmay 4y ago
  Outside of specific places I'm not sure that's even the issue. Nobody is objecting to new homes in Ohio, for example.
  - crooked-v 4y ago
    People move to where there are jobs. Ohio has about 5.4 million jobs currently (going by the Current Employment Statistics survey) and a population of about 11.8 million, and while there's obviously some wiggle room there because jobs aren't a zero-sum game, "get everyone to move to Ohio" ultimately isn't a very helpful plan.
    - ericmay 4y ago
      I guess in this discussion I was talking more about the national housing market, rates, and rent and not specific cities.
  - harambae 4y ago
    You don't have to go all the way to Ohio. In the (former farmland) of Morgan Hill they are turning out subdivisions. Mountain View keeps looking more built up. Just not much progress in San Francisco, Palo Alto, or Atherton.

AmVess 4y ago

High rents in many places. The cost of homes going up because of lack of supply and now because of mortgage rates. Where I used to live the cost of starter homes has gone through the roof, and there's tight supply. I rented them out for $1k-ish and now rents are double that...all in about 5 years. Add in landlord unfriendly policies, and rents go up even more. In some areas, these policies are driving out individual landlords, leaving only institutional investors who look for any excuse to raise rents. Rents are expensive now with no end of increases in sight.

crooked-v 4y ago

I personally expect increasingly desperate attempts by state and city governments to do literally anything except actually allow enough housing to be built. I don't know where that will lead, but favelas and multigenerational inherites rent contol contracts seem likely.

ericmay 4y ago
Outside of specific places I'm not sure that's even the issue. Nobody is objecting to new homes in Ohio, for example.
- crooked-v 4y ago
  People move to where there are jobs. Ohio has about 5.4 million jobs currently (going by the Current Employment Statistics survey) and a population of about 11.8 million, and while there's obviously some wiggle room there because jobs aren't a zero-sum game, "get everyone to move to Ohio" ultimately isn't a very helpful plan.
  - ericmay 4y ago
    I guess in this discussion I was talking more about the national housing market, rates, and rent and not specific cities.
- harambae 4y ago
  You don't have to go all the way to Ohio. In the (former farmland) of Morgan Hill they are turning out subdivisions. Mountain View keeps looking more built up. Just not much progress in San Francisco, Palo Alto, or Atherton.