3 ms·

Lots of people have made that point, but I’ll respond here. Yes this is true, but only at this point in time when interest rates have shot up from historically

Lots of people have made that point, but I’ll respond here. Yes this is true, but only at this point in time when interest rates have shot up from historically low. Most of the time this won’t be the case, and soon this effect could work in the other way in that you could move to a house of similar value for a lower cost if interest rates come down. And the 30 year fixed rate mortgage is unique to the US. Here in the UK, we only fix for 2-5 years typically. So easy on the downvotes!

bobthepanda 3y ago
Do people expect interest rates to lower again any time soon? Inflation just recently started trending down. Right now US supply has shrunk so prices don’t seem to be declining enough to offset the rise in interest rates; the monthly payments for anything in the market are still eye-watering even factoring in price declines.
- nonethewiser 3y ago
  Well if you expect them to rise or stay the same for a while then now is actually not a bad time to buy.
nradov 3y ago
It is actually pretty much the case for most US homeowners. Everyone I know refinanced their mortgages when interest rates were lower. I got a 2.874% 30 year fixed rate mortgage in 2021 which was a great deal, but now I am essentially stuck here. There's no way I can afford to move. Existing home sales volume is way down. https://www.wsj.com/articles/low-mortgage-rates-home-sales-low-supply-899aab29 https://www.wsj.com/articles/low-mortgage-rates-home-sales-l... https://ycharts.com/indicators/us_existing_home_sales https://ycharts.com/indicators/us_existing_home_sales The situation may be different in other countries.
- throwaway2037 3y ago
  You wrote: There's no way I can afford to move. You are lucky to win the housing lottery. Congrats! Can you imagine being a young couple (20s 30s) trying to buy your first home the US right now? Hopeless. Wait a few years as an oppressed renter!
  - nradov 3y ago
    Yes, I am lucky in many ways. But the US home ownership rate is 65%, so it's hardly a lottery. Many young couples are buying homes in lower cost states like Utah, Minnesota, and Ohio. HN users focusing on California often have a distorted perspective on the situation out in the real world.
    - 0cf8612b2e1e 3y ago
      California is home to more people than those three states combined.
throwaway2037 3y ago
I am very symphathetic to this issue for UK borrowers. They face way too much interest rate volatility. There is a gambling effect in the UK about housing. Are you aware that 30-fixed in the US is essentially gov't backed via three mega pseudo-gov't guaranteed orgs called Fannie, Freddie, Ginnie Mae? It is great for increasing home ownership and utterly oppressive to low income people renting. It is tough. I cannot believe that more countries do not (politically) prioritise a similar system: Cheap, fixed 30-year'ish home mortgages. To be clear, I'm not saying this is economically ideal, but it is great for your political party!

bobthepanda 3y ago

Do people expect interest rates to lower again any time soon? Inflation just recently started trending down. Right now US supply has shrunk so prices don’t seem to be declining enough to offset the rise in interest rates; the monthly payments for anything in the market are still eye-watering even factoring in price declines.

nonethewiser 3y ago
Well if you expect them to rise or stay the same for a while then now is actually not a bad time to buy.

nradov 3y ago

It is actually pretty much the case for most US homeowners. Everyone I know refinanced their mortgages when interest rates were lower. I got a 2.874% 30 year fixed rate mortgage in 2021 which was a great deal, but now I am essentially stuck here. There's no way I can afford to move. Existing home sales volume is way down. https://www.wsj.com/articles/low-mortgage-rates-home-sales-low-supply-899aab29 https://www.wsj.com/articles/low-mortgage-rates-home-sales-l... https://ycharts.com/indicators/us_existing_home_sales https://ycharts.com/indicators/us_existing_home_sales The situation may be different in other countries.

throwaway2037 3y ago
You wrote: There's no way I can afford to move. You are lucky to win the housing lottery. Congrats! Can you imagine being a young couple (20s 30s) trying to buy your first home the US right now? Hopeless. Wait a few years as an oppressed renter!
- nradov 3y ago
  Yes, I am lucky in many ways. But the US home ownership rate is 65%, so it's hardly a lottery. Many young couples are buying homes in lower cost states like Utah, Minnesota, and Ohio. HN users focusing on California often have a distorted perspective on the situation out in the real world.
  - 0cf8612b2e1e 3y ago
    California is home to more people than those three states combined.

throwaway2037 3y ago

I am very symphathetic to this issue for UK borrowers. They face way too much interest rate volatility. There is a gambling effect in the UK about housing. Are you aware that 30-fixed in the US is essentially gov't backed via three mega pseudo-gov't guaranteed orgs called Fannie, Freddie, Ginnie Mae? It is great for increasing home ownership and utterly oppressive to low income people renting. It is tough. I cannot believe that more countries do not (politically) prioritise a similar system: Cheap, fixed 30-year'ish home mortgages. To be clear, I'm not saying this is economically ideal, but it is great for your political party!