3 ms·
That’s a ridiculous statement. It’s not the rates that matter but the monthly payment. A 800K mortgage (which is a very reasonable number in most cities), would
by darth_avocado 3y ago
That’s a ridiculous statement. It’s not the rates that matter but the monthly payment. A 800K mortgage (which is a very reasonable number in most cities), would be a 3K/month payment @2.5% but 5.6K/month @7.5%.
So excuse me if I complain about having to pay almost twice the amount.
People like to give the example of high interest rates in the past and how that was fine, but often forget to account for the fact that home prices were low, home ownership numbers were high (thus stable supply/demand), income to cost of living and income to cost of housing ratios were much more reasonable than today. So yeah, high interest rates work in different conditions but not in the distopia that exists today.
- ethanbond 3y agoRight but in that case the housing price and not the interest rate is the problem, isn’t it? Housing prices: record high Interest rate: pretty moderate Problem: the pretty moderate thing? The solution to either of these problems is different. Answer to high housing prices: build more. Answer to high interest: lower interest, which then inflates housing prices, which without more building means just more people priced out. The issue is prices which is an issue with supply.
- darth_avocado 3y agoI agree but with a caveat. My original comment (the parent on this thread) was about supply. Ideally moderate interest rates are not a problem, but when you get there by aggressively hiking the rates after a decade of low rates, it becomes a problem. Mostly because anyone who didn’t benefit from the environment (90+% of the population), will have a hard time catching up even with moderate rates.