Very good points in this thread all around. I agree with all of them. Even though the effective post tax increase on a higher payment is lower then the pre tax increase, that sticker shock is real and I find buyers adhere to monthly budget that is pre tax based. Most people do not have the discipline to save the tax refund and then spread it out over the mortgage payments for the entire year. Similarly higher rates reduce buying power and qualifications so I do fee that the rate hikes hurt alot even with post tax calculations taken into the calculation.
I do kind of believe we are in a longer term low rate environment IFF (if and ONLY if) our foreign creditors keep extending our bar tab. I believe the treasuries are pretty much the benchmark for alot of lending activities, be it corporates, munis, even mortgages. To me, and I am a simple man, the only thing that fluctuates is the margins on these other vehicles and those margins are basically risk assessments. I can be and probaby am wrong to view things in that simple of a manner. Counselor and Pem are probably correct, as long as the pipe keeps flowing from China it seems like it is a reasonable assessment. When that spigot is shut down though…
