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I think you want to look at cost, not price, i.e., you want to add in that interest rates have risen to the equation. Does the decreased price more than make up

I think you want to look at cost, not price, i.e., you want to add in that interest rates have risen to the equation. Does the decreased price more than make up for the increased mortgage? Given the Fed's stated intent with interest rates is demand destruction: raise interest rates, make mortgages more costly, which (to them) hopefully causes some people to not pursue mortgages, and ultimately not buy houses. This would lower the price of homes (less demand) and there would presumably be some new equilibrium. But people gotta live somewhere, and if they're not buying homes, then there's a chance they're renting instead. So if there are more renters than before, I'm not going to hold my breath on rent going down. Although, > “Surprisingly, we are finding that the buyers are still out there,” despite the increased mortgage rates IMO, the housing crisis is a lack of supply. Fixing it will require more homes.

highwaylights 4y ago
I'm not sure this comparison is as clear cut as it's always made out to be. People can continue to live with their parents. In many cultures multiple generations live under a single roof. You may not want to do that, but it can be done. None of this is to say that I think people should be forced to live with their parents or that it's a solution, I'm just saying if you were looking at this from the perspective of destroying demand to right the ship then it's not impossible that it creates a situation where a lot of people find a way to make it work in the short term, which might in itself be enough to create a drop in asking prices/rent. Even then, the problem isn't even remotely a lack of homes, it's a glut of poverty profiteers in the form of landlords, but good luck getting a political class that's on the take to fix that the just way (by taxing rentals enough that it's no longer palatable).
- BobbyJo 4y ago
  The opportunity cost of living with your parents (what jobs are available in that area) is high in many places, especially in a country as spread out as the US. The economy pays a price when it allows housing costs to prevent worker mobility.
  - highwaylights 4y ago
    It does, but people won’t support the simple and immediate fix for this problem (severe taxes on rental properties).
- pwinnski 4y ago
  In one sense, you're clearly correct. Most people living rough aren't doing so because there are no homes available for them to live in, so given that our kids aren't generally homeless, clearly they're living with parents, or roommates, or something. Fannie Mae says, for example, that we are lacking 3.8 million homes for people to live in[0]. That's a serious undersupply! Build more houses! The NYTimes is on the case, too[1]. Conversion of homes into rental units is definitely a big part of the problem, but there are numbers on that, too. Turns out there are more vacant homes than Fannie Mae said the undersupply is, 17 million by one reckoning[2]! Not all of those are vacant due to landlords being involved, but a lot are. 0. https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... 1. https://www.nytimes.com/2021/02/26/upshot/where-have-all-the-houses-gone.html https://www.nytimes.com/2021/02/26/upshot/where-have-all-the... 2. https://ggwash.org/view/73234/vacant-houses-wont-solve-our-housing-crisis https://ggwash.org/view/73234/vacant-houses-wont-solve-our-h...
- rjmunro 4y ago
  I know someone who bought 2 apartments to rent out, then he himself moved back in with his parents.

highwaylights 4y ago

I'm not sure this comparison is as clear cut as it's always made out to be. People can continue to live with their parents. In many cultures multiple generations live under a single roof. You may not want to do that, but it can be done. None of this is to say that I think people should be forced to live with their parents or that it's a solution, I'm just saying if you were looking at this from the perspective of destroying demand to right the ship then it's not impossible that it creates a situation where a lot of people find a way to make it work in the short term, which might in itself be enough to create a drop in asking prices/rent. Even then, the problem isn't even remotely a lack of homes, it's a glut of poverty profiteers in the form of landlords, but good luck getting a political class that's on the take to fix that the just way (by taxing rentals enough that it's no longer palatable).

BobbyJo 4y ago
The opportunity cost of living with your parents (what jobs are available in that area) is high in many places, especially in a country as spread out as the US. The economy pays a price when it allows housing costs to prevent worker mobility.
- highwaylights 4y ago
  It does, but people won’t support the simple and immediate fix for this problem (severe taxes on rental properties).
pwinnski 4y ago
In one sense, you're clearly correct. Most people living rough aren't doing so because there are no homes available for them to live in, so given that our kids aren't generally homeless, clearly they're living with parents, or roommates, or something. Fannie Mae says, for example, that we are lacking 3.8 million homes for people to live in[0]. That's a serious undersupply! Build more houses! The NYTimes is on the case, too[1]. Conversion of homes into rental units is definitely a big part of the problem, but there are numbers on that, too. Turns out there are more vacant homes than Fannie Mae said the undersupply is, 17 million by one reckoning[2]! Not all of those are vacant due to landlords being involved, but a lot are. 0. https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives... 1. https://www.nytimes.com/2021/02/26/upshot/where-have-all-the-houses-gone.html https://www.nytimes.com/2021/02/26/upshot/where-have-all-the... 2. https://ggwash.org/view/73234/vacant-houses-wont-solve-our-housing-crisis https://ggwash.org/view/73234/vacant-houses-wont-solve-our-h...
rjmunro 4y ago
I know someone who bought 2 apartments to rent out, then he himself moved back in with his parents.