It’s clear few people here have a true understanding of what low interest rates do. Low interest rates help existing asset owners. Period. They hurt new asset purchasers. This is true in bonds, stocks, and housing. In housing, low interest rates help sellers. The additional “affordability” granted to buyers through lower interest rates is offset by higher housing prices (higher principal payments). Existing asset owners can now sell for more or refinance to capture that value that new home buyers cannot.
These Higher housing prices are also not a 1-1 reflection of lower interest rates. They’re much higher than lower interest rates would alone lead to. Peoples salaries have remained stagnant. They’ve made money in the stock market and can use that to buy a house. But the stock markets not going to increase 50% per year each year. Interest rates going back up will also keep a lid on housing prices. Until salaries go up significantly, housing prices can’t continue to go up (unless stocks keep going up or interest rates turn negative) |
I thought everyone who made a successful offer was paying cash. Rates don't matter in a cash situation. |
People have been saying prices are coming down forever. Smh! |
And people have been saying that "the only direction rates can go is up" forever as well. Guess what? They're going to zero. Japan 2.0. |
pretty simple: dc is closest to the money printer |
No real difference in competitiveness between an actual cash offer and an offer with financing that has waived all contingencies -- either way, the buyer is going to be in default if they don't close. So rates do matter for most buyers. |
But at some point don't you need to sell? I mean, unless you're past the 30-year mark and just collecting rent while paying insurance & property taxes. How many people pay off 12 properties? Is that even realistic for 99% of the population? |