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I find it amusing that people talked about low interest rates making housing more expensive and now people say high interest rates make housing more expensive.
by imtringued 3y ago
I find it amusing that people talked about low interest rates making housing more expensive and now people say high interest rates make housing more expensive.
The thing is, I don't think there is a "money" problem when it comes to housing. More or less money won't change a thing. The problem is on the physical side. One house can only house one family. If there are too few houses and too many families, houses will be expensive no matter the interest rate. The interest rate is just an additional expense on top that determines the bankers' share in the deal.
- mensetmanusman 3y agoMore people live alone now than ever, which has actually drastically reduced supply. Any interesting consequence of all the boomer divorces is the square footage required for their lives almost doubled.
- loeg 3y agoLow interest rates helped drive prices higher, but high interest rates help drive monthly costs higher even without higher nominal prices. You’re right that it’s ultimately a supply and demand problem.