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The article concludes with "the current mortgage rates are looking painful, which I’m guessing is going to increase the share of renting." -- I actually have t

The article concludes with "the current mortgage rates are looking painful, which I’m guessing is going to increase the share of renting." -- I actually have the hope that increasing interest rates will decrease the share of renting. This is because I had thought that the rise of rental houses was due to historically low mortgage rates leading to artificially high profitability for landlords. Now that rates are more normal, its my feeling that landlords will be squeezed out of the market, and more single family homes will be owner occupied. I'm actually hoping that the landlords and AirBNB owners on ARMs will be forced to sell when their rates adjust upwards, which will increase housing supply and finally pop this bubble.

bugglebeetle 3y ago
Nope, they’ll just sell them off to large investment firms that are flush with funds after the long period of low interests rates. They intend to keep everyone renting forever so that the whole scheme can be packaged and sold as an asset class.
- drewg123 3y ago
  I've heard the opposite -- eg that firms like Black Rock have stopped buying houses and are now selling them. Eg: https://www.youtube.com/watch?v=WcL9_xd-il8 https://www.youtube.com/watch?v=WcL9_xd-il8
  - throwaw12 3y ago
    video is a year old, at the time big corps started dumping anything they felt like a risk. curious if this still true today. they might not be selling, but also not buying at the moment
Spooky23 3y ago
It doesn’t work that way. Rising rates clear out the shitty companies with too much debt, but the people with cash sweep in and buy it out. Increasing rates will raise rents in the professional demographic cohorts of folks who buy houses.
- gustavus 3y ago
  > Increasing rates will raise rents in the professional demographic cohorts of folks who buy houses. Well with the way houses have inflated in my neck of the woods very few people even financially savvy DINKs are going to have trouble buying homes in cash.
JambalayaJim 3y ago
High mortgage rates affect owner occupiers just as much as potential landlords, and possibly even more. Landlords are likely to be much more cash rich than owner occupiers. High rates are a serious impediment to first time buyers especially, who need to take on lots of debt to fund their purchase. Especially as rental rates increase during periods of high rates (note that landlords are like to increase rental prices to try and keep afloat, and developers are less likely to build when it’s more expensive to do so).
- edmundsauto 3y ago
  Landlords of multiple units are likely to hit the cap on mortgage interest deduction. They also tend to pay higher rates than primary residences.

bugglebeetle 3y ago

Nope, they’ll just sell them off to large investment firms that are flush with funds after the long period of low interests rates. They intend to keep everyone renting forever so that the whole scheme can be packaged and sold as an asset class.

drewg123 3y ago
I've heard the opposite -- eg that firms like Black Rock have stopped buying houses and are now selling them. Eg: https://www.youtube.com/watch?v=WcL9_xd-il8 https://www.youtube.com/watch?v=WcL9_xd-il8
- throwaw12 3y ago
  video is a year old, at the time big corps started dumping anything they felt like a risk. curious if this still true today. they might not be selling, but also not buying at the moment

Spooky23 3y ago

It doesn’t work that way. Rising rates clear out the shitty companies with too much debt, but the people with cash sweep in and buy it out. Increasing rates will raise rents in the professional demographic cohorts of folks who buy houses.

gustavus 3y ago
> Increasing rates will raise rents in the professional demographic cohorts of folks who buy houses. Well with the way houses have inflated in my neck of the woods very few people even financially savvy DINKs are going to have trouble buying homes in cash.

JambalayaJim 3y ago

High mortgage rates affect owner occupiers just as much as potential landlords, and possibly even more. Landlords are likely to be much more cash rich than owner occupiers. High rates are a serious impediment to first time buyers especially, who need to take on lots of debt to fund their purchase. Especially as rental rates increase during periods of high rates (note that landlords are like to increase rental prices to try and keep afloat, and developers are less likely to build when it’s more expensive to do so).

edmundsauto 3y ago
Landlords of multiple units are likely to hit the cap on mortgage interest deduction. They also tend to pay higher rates than primary residences.