Let’s make it clear. Higher rate is bad for housing as an industry. But not for us Piggingtons who have the ability to buy.
We are now a credit based society and housing is tied to monthly payments. Higher interest rates result in lower housing price to achieve the same monthly payments that people can “afford.”
If you’re a long term buyer, you want ultra high rates + ultra low prices. Buy that cheap house at very high rates. Hold it until the next cycle then refinance into low rates. You win because you end up with property that’s almost paid for with a low principal balance.
Seller should worry at higher rates, but Piggingtons should celebrate.
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The free market causes yields to go higher or lower. If you perceive higher risks, you want a higher yield.
For example if the Japanese and Chinese are lending us money, and they are worried about foreclosures, they’ll ask for higher yields to price-in those non-payers. Kinda like a store charging more to make up for the losses due to shoplifters.