4 ms·
> What does lower interest rates have to do with lower rents? Interest rates affect repayments. Higher repayments mean that the rent an owner is willing to acc
by JenrHywy 4y ago
> What does lower interest rates have to do with lower rents?
Interest rates affect repayments. Higher repayments mean that the rent an owner is willing to accept will be higher (or, they won't enter the market).
Your whole model seems a little strange to me. Keeping rates low/stable is not a housing subsidy; it's about keeping the entire economy growing at a sustainable rate.
- lotsofpulp 4y agoKeeping rates artificially low/stable is a subsidy, to keep asset prices growing at a rate that matches people’s expectations so there is not any political unrest when people’s 401k and pension and house price does not end up where they think it should. My model is about helping people acquire a home they can live in. Which means having a home available for them to live in, and giving them cash to obtain it. Using taxpayer funded loans is wholly unnecessary to accomplish that, and is a wealth transfer from non land owners to land owners in the long run.