So all those inflationary forces will soon produce dramatic inflation which will drive mortgage rates up, eventually to double digit interest rates.
A buy point for housing will come soon where the risk of ever-increasing mortgage interest rates will overshadow the downside risk associated with continued falling housing prices.
Actually, high interest rates dampen inflation. It dries up cheap capital. The last time we had inflation with high interest rates, house prices were held low.
If interest rates are high, it is hard for someone to buy in, which knocks the support out of house prices. The best time to buy is actually when interest rates are at their highest and about to go back down. Your down payment goes the furthest and house prices are held down by the cost of financing.
I’m not sure that future typical raises will keep pace with inflation
I am anticipating that they won’t for a while. Comparative wage rates out of country are lower. With a global economy, things such as wage rates tend to eventually balance out. I think that some high demand jobs will keep pace, but other low skill will not.
However, I’m keeping the faith on a deepening recession taking the markets down at least 10% from here.
Be careful. You have two forces at play, not one. Inflation drives markets up, recession drives them down.. The market is still trying to decide who is going to win – buy/short for only short periods of time.
