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Buyers don't buy in a vacuum. When mortgage rates rise, it reduces the buying power of a large portion of the market, and the value of the homes themselves decl
by tomkarlo 13y ago
Buyers don't buy in a vacuum. When mortgage rates rise, it reduces the buying power of a large portion of the market, and the value of the homes themselves decline as a result. Yes, a cash buyer could still pay the same amount, but why would they?
- muzz 13y agoIn efficient markets, buyers are theoretically not irrational either. In theory, the cash buyers of today have factored in their expectations of rising interest rates and the effect on home values going forward.
- tomkarlo 13y agoDoes anyone really still believe that real estate represents an efficient market? Regardless, if someone did believe that, and factored in expectations of rising rates, they simply wouldn't be a buyer in this market.