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Bring it on. I can't wait to buy a house in the next 6 months. People with money who want desperately out of the renting game don't care at all about 8% interes

Bring it on. I can't wait to buy a house in the next 6 months. People with money who want desperately out of the renting game don't care at all about 8% interest rates. But the investors and second home buyers sure do. This has been the biggest thing keeping me out of the market since 2020; the time pressure, not the prices. I just refuse to make a massive financial decision on the spot based on a 15 minute open house tour with zero contigencies and huge earnest payments.

metamet 3y ago
> But the investors and second home buyers sure do. I'm curious about this, because from what I've heard, a lot of investors are incredibly happy with the higher interest rates as they're paying cash for a lot of homes, which has been squeezing real homeowners out of the market since they are able to shortcut by making offers on houses without requiring financing.
- deleted 3y ago
  [deleted]
- quickthrowman 3y ago
  The higher the risk-free rate goes, the less attractive housing is as an investment. Treasuries don’t require maintenance and upkeep.
- HDThoreaun 3y ago
  No investors are paying cash for homes. The entire real estate game is about maximizing leverage with the massive home loans you can get.
  - metamet 3y ago
    They absolutely are. I have multiple friends who received cash offers from investment companies when selling their homes. It's fairly common and well known. "We buy houses" companies are everywhere. It's their entire strategy.
    - HDThoreaun 3y ago
      "cash offer" here means they already have the loans lined up.
      - metamet 3y ago
        They may have lines of credit, but they aren't taking out a mortgage--especially in the same market/rates that are available to homeowners. REITs and other investors will often pay cash, especially when it's a residential unit they look to either rent or flip.
- andrewjl 3y ago
  Institutional investors would need to justify to their LPs why whatever they will end up earning beats buying and holding Treasuries instead. The higher rates Treasuries have the tougher it is to make that justification.
swsdsailor 3y ago
When fed lowers rates there will be another massive boom, so prepare for it!
- x3sphere 3y ago
  Rate cuts are usually done in response to unemployment spiking. It could take things awhile to recover once they start cutting as that likely means the economy has entered a recession. That being said - it could be the best time to buy, but not for those that lose their job.
freeplay 3y ago
This is why nothing is going to "collapse." There are so many people in your position just wanting to buy the second prices start to fall a little. That will prevent any type of serious collapse and it will be more of a minor correction at best.
- x3sphere 3y ago
  Will they be able to buy though if they lose their job? Rate cuts usually come with a spike in unemployment, so... That said I still don't think there will be a collapse unless there is like, worse unemployment than 2008. But - prices could still easily drop 10-15% if this is a more mild recession.

metamet 3y ago

> But the investors and second home buyers sure do. I'm curious about this, because from what I've heard, a lot of investors are incredibly happy with the higher interest rates as they're paying cash for a lot of homes, which has been squeezing real homeowners out of the market since they are able to shortcut by making offers on houses without requiring financing.

deleted 3y ago
[deleted]
quickthrowman 3y ago
The higher the risk-free rate goes, the less attractive housing is as an investment. Treasuries don’t require maintenance and upkeep.
HDThoreaun 3y ago
No investors are paying cash for homes. The entire real estate game is about maximizing leverage with the massive home loans you can get.
- metamet 3y ago
  They absolutely are. I have multiple friends who received cash offers from investment companies when selling their homes. It's fairly common and well known. "We buy houses" companies are everywhere. It's their entire strategy.
  - HDThoreaun 3y ago
    "cash offer" here means they already have the loans lined up.
    - metamet 3y ago
      They may have lines of credit, but they aren't taking out a mortgage--especially in the same market/rates that are available to homeowners. REITs and other investors will often pay cash, especially when it's a residential unit they look to either rent or flip.
andrewjl 3y ago
Institutional investors would need to justify to their LPs why whatever they will end up earning beats buying and holding Treasuries instead. The higher rates Treasuries have the tougher it is to make that justification.

swsdsailor 3y ago

When fed lowers rates there will be another massive boom, so prepare for it!

x3sphere 3y ago
Rate cuts are usually done in response to unemployment spiking. It could take things awhile to recover once they start cutting as that likely means the economy has entered a recession. That being said - it could be the best time to buy, but not for those that lose their job.

freeplay 3y ago

This is why nothing is going to "collapse." There are so many people in your position just wanting to buy the second prices start to fall a little. That will prevent any type of serious collapse and it will be more of a minor correction at best.

x3sphere 3y ago
Will they be able to buy though if they lose their job? Rate cuts usually come with a spike in unemployment, so... That said I still don't think there will be a collapse unless there is like, worse unemployment than 2008. But - prices could still easily drop 10-15% if this is a more mild recession.