It’s all very well to have wonderfully low rates, but how long can rates continue to be held down, and what will be the effect on real estate prices when they eventually go up, which they most probably will? One argument might be that buyers will simply lower their expectations as to what they can afford, and prices will remain the same. Or, will there be another wave of foreclosures down the road as those expectations don’t translate into sales, putting pressure on prices and leading to the downward spiral we have been witnessing of recent. Maybe the market can absorb small increases, but can it cope with large hikes in the next 3-5 years say?
Being that the Fed has said they are committed to an extended period of low rates, and they seem to have the ability to print an infinite amount of dollars to buy whatever T-Notes are necessary to hold the rate exactly where they want them. I would say barring an sudden upsurge in wage pressure, it is unlikely rates will go up anytime soon.
If there is an upsurge in wages well then ….
If the end the Fed crowd gets in well all bets are off.
OT I heard an interesting Joke,
Man-1 says, : you know Gold looks to be in a bubble
Man-2 says : yea but it’s been in a bubble for 4000 years
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