4 ms·
this is why the housing market is frozen up in the US, until job losses or something else force people to sell renters can't afford houses and home owners have
by ren_engineer 3y ago
this is why the housing market is frozen up in the US, until job losses or something else force people to sell renters can't afford houses and home owners have no reason to sell because losing their 3% mortgage would force them to downgrade homes.
Check out Canada housing prices where they only have 5 year fixed rates, 1.3M dollar homes 2 years ago are selling for 700-800K. This is what will happen in the US unless interest rates go down again, it's basic math.
- robocat 3y agoI didn't see this in Christchurch, New Zealand. Interest rates went up making mortgages harder to get. However house prices remained steady and you couldn't see much price reduction in the market because if someone has a house and a mortgage, they don't want to psychologically take a loss. Few people are willing to lose money. They can't buy in same market (downgrade) because so few people are selling and mortgages are harder to get. Mostly the few people selling are only selling because they are forced to due to their circumstances. The turnover (houses sold per month) dropped drastically. We don't have 30 year fixed. We have essentially variable rate interest rates (you can fix for up to 5 years (median fixes for 2 years) but after that the interest rate resets back to current market rate - you can fix again for a few years at current market).