4 ms·

When I read this, I can feel the pull of confirmation bias pushing me to nod my head in agreement, but my skeptical side longs for more citation. The author mak

When I read this, I can feel the pull of confirmation bias pushing me to nod my head in agreement, but my skeptical side longs for more citation. The author makes many claims of fact in this article, but offers no citations to back them up. For example: > Because there is a huge glut of empty new houses. Builders are being forced to drop prices even faster than owners, because builders must sell to keep their business going. Aren't there statistics available that show housing inventory levels over time? I can't refute the claim, because I don't know where to find those statistics, but I'm skeptical of claims provided without citation. The entire thing seems very rational, but I'm reminded of the quote, "The market can remain irrational longer than you can remain solvent." I wish there were more citations to back up the facts. Maybe I'll do some of the footwork myself.

twoodfin 13y ago
Agree. And where are the indications that interest rates will rise substantially any time soon? I'm not saying that's impossible, but this piece seems to take it as an article of faith that we're in a period of unsustainably low rates.
- dxhdr 13y ago
  http://mortgage-x.com/images/graph/fhfb_contract_rate.gif http://mortgage-x.com/images/graph/fhfb_contract_rate.gif We are in unprecedented territory here, interest rates have never been this low. Is it sustainable? Who knows. Given history I'd be more inclined to believe it's not.
  - twoodfin 13y ago
    Doesn't that chart contradict the article? Home prices didn't decline from 1960 to 1980, as interest rates climbed dramatically: http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/ http://www.multpl.com/case-shiller-home-price-index-inflatio... There's obviously some relationship there, but it's not as clear cut as this article makes it out to be.
- wonnage 13y ago
  It's already happening: http://www.bloomberg.com/news/2013-09-17/less-tapering-becomes-tightening-credit-no-matter-what-fed-says.html http://www.bloomberg.com/news/2013-09-17/less-tapering-becom... Considering that for a period of time it was practically free to borrow money (interest rate < inflation), I don't think it's that unreasonable to describe that as "unsustainable".
sliverstorm 13y ago
My skeptical side keeps reminding me that most of this article expressly disagrees with what I've experienced & observed, but I'm playing in the super-affordable end of the market (2 years salary) so I can't necessarily refute points in an article about expensive houses.

twoodfin 13y ago

Agree. And where are the indications that interest rates will rise substantially any time soon? I'm not saying that's impossible, but this piece seems to take it as an article of faith that we're in a period of unsustainably low rates.

dxhdr 13y ago
http://mortgage-x.com/images/graph/fhfb_contract_rate.gif http://mortgage-x.com/images/graph/fhfb_contract_rate.gif We are in unprecedented territory here, interest rates have never been this low. Is it sustainable? Who knows. Given history I'd be more inclined to believe it's not.
- twoodfin 13y ago
  Doesn't that chart contradict the article? Home prices didn't decline from 1960 to 1980, as interest rates climbed dramatically: http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/ http://www.multpl.com/case-shiller-home-price-index-inflatio... There's obviously some relationship there, but it's not as clear cut as this article makes it out to be.
wonnage 13y ago
It's already happening: http://www.bloomberg.com/news/2013-09-17/less-tapering-becomes-tightening-credit-no-matter-what-fed-says.html http://www.bloomberg.com/news/2013-09-17/less-tapering-becom... Considering that for a period of time it was practically free to borrow money (interest rate < inflation), I don't think it's that unreasonable to describe that as "unsustainable".

sliverstorm 13y ago

My skeptical side keeps reminding me that most of this article expressly disagrees with what I've experienced & observed, but I'm playing in the super-affordable end of the market (2 years salary) so I can't necessarily refute points in an article about expensive houses.