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[quote=Anonymous][quote=Anonymous]

This makes no sense. Interest rates have been extremely low since the 2008 financial crisis. Yes, they've come up a bit but they're still at 2.5 percent and Powell is getting ready to cut them again. The Federal Reserve is why housing prices go up so fast. This is not disputed. It's a deliberate byproduct of Fed policy -- they've said explicitly that this is what they are doing.

When interest rates go back up to normal levels -- and it is inevitable -- everyone is going to be in for a shock. Because sellers suddenly won't be able to get anything near what they thought their house was worth and buyers won't be able to afford nearly as much as they thought they could. The result is housing prices are going to go way down. Even in Washington D.C. This has already been happening, even with interest rates going from zero to 2.5 percent. Ask a realtor -- they see this firsthand.

It is very weird that people emphasize the importance of the supply of housing, and downplay the importance of interest rates. That's exactly backwards.  Yes, the supply matters but only over many decades. [b]If you want to change housing prices, increasing the supply is an extremely slow way to do it.[/b] [/quote]

On the other hand, if you want to increase the supply of housing, then increasing the supply of housing is the very thing to do.[/quote]

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