Home › Forums › Closed Forums › Buying and Selling RE › The risks of buying with record low interest rates
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DWCAP.
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January 29, 2008 at 3:24 PM #11663January 29, 2008 at 3:37 PM #144761
DWCAP
ParticipantYou assume that the conforming loan limit would be allowed to go back down in the future. Politics and the NAR would never allow that to happen once the cat is outa the bag. Remember, this is the government that gave us a rebate on our taxes last year because they were still collecting a tax on telephones that was inacted to pay for WWI ( or WWII, I forget). Either way that was 60-80+ years of taxation. Temporary isnt really temporary, it just means that they will have to pass another “fix” next year. It lets a Pol tell you they are doing something when they really are not, and keeps the PAC and special interest lobby money rolling in. If you want an example, think the alternative minimum tax that is so loathed on this board. Every year it is indexed up alittle so the middle class doesn’t revolt, but left open because if they fixed it, they would have to account for the Ten’s of Billions of dollars that would be lost in tax revenue.
January 29, 2008 at 3:37 PM #145100DWCAP
ParticipantYou assume that the conforming loan limit would be allowed to go back down in the future. Politics and the NAR would never allow that to happen once the cat is outa the bag. Remember, this is the government that gave us a rebate on our taxes last year because they were still collecting a tax on telephones that was inacted to pay for WWI ( or WWII, I forget). Either way that was 60-80+ years of taxation. Temporary isnt really temporary, it just means that they will have to pass another “fix” next year. It lets a Pol tell you they are doing something when they really are not, and keeps the PAC and special interest lobby money rolling in. If you want an example, think the alternative minimum tax that is so loathed on this board. Every year it is indexed up alittle so the middle class doesn’t revolt, but left open because if they fixed it, they would have to account for the Ten’s of Billions of dollars that would be lost in tax revenue.
January 29, 2008 at 3:37 PM #145030DWCAP
ParticipantYou assume that the conforming loan limit would be allowed to go back down in the future. Politics and the NAR would never allow that to happen once the cat is outa the bag. Remember, this is the government that gave us a rebate on our taxes last year because they were still collecting a tax on telephones that was inacted to pay for WWI ( or WWII, I forget). Either way that was 60-80+ years of taxation. Temporary isnt really temporary, it just means that they will have to pass another “fix” next year. It lets a Pol tell you they are doing something when they really are not, and keeps the PAC and special interest lobby money rolling in. If you want an example, think the alternative minimum tax that is so loathed on this board. Every year it is indexed up alittle so the middle class doesn’t revolt, but left open because if they fixed it, they would have to account for the Ten’s of Billions of dollars that would be lost in tax revenue.
January 29, 2008 at 3:37 PM #145027DWCAP
ParticipantYou assume that the conforming loan limit would be allowed to go back down in the future. Politics and the NAR would never allow that to happen once the cat is outa the bag. Remember, this is the government that gave us a rebate on our taxes last year because they were still collecting a tax on telephones that was inacted to pay for WWI ( or WWII, I forget). Either way that was 60-80+ years of taxation. Temporary isnt really temporary, it just means that they will have to pass another “fix” next year. It lets a Pol tell you they are doing something when they really are not, and keeps the PAC and special interest lobby money rolling in. If you want an example, think the alternative minimum tax that is so loathed on this board. Every year it is indexed up alittle so the middle class doesn’t revolt, but left open because if they fixed it, they would have to account for the Ten’s of Billions of dollars that would be lost in tax revenue.
January 29, 2008 at 3:37 PM #145001DWCAP
ParticipantYou assume that the conforming loan limit would be allowed to go back down in the future. Politics and the NAR would never allow that to happen once the cat is outa the bag. Remember, this is the government that gave us a rebate on our taxes last year because they were still collecting a tax on telephones that was inacted to pay for WWI ( or WWII, I forget). Either way that was 60-80+ years of taxation. Temporary isnt really temporary, it just means that they will have to pass another “fix” next year. It lets a Pol tell you they are doing something when they really are not, and keeps the PAC and special interest lobby money rolling in. If you want an example, think the alternative minimum tax that is so loathed on this board. Every year it is indexed up alittle so the middle class doesn’t revolt, but left open because if they fixed it, they would have to account for the Ten’s of Billions of dollars that would be lost in tax revenue.
January 29, 2008 at 3:39 PM #145105blahblahblah
ParticipantThis is a very interesting topic and I’ve been thinking about the same thing. If interest rates go back up, home prices will need to come down. However, interest rates won’t go up unless we are in an inflationary environment. In an inflationary environment, salaries will increase too so that will put upward pressure again on home prices. It could very well be that the guy who buys today at a 20% nominal discount from the 2005 peak with a very low fixed interest rate could come out ahead of someone buying two years from now with a much higher rate, even though the nominal price might fall a bit between now and then.
I’m as much of a bear as anyone, but just such a scenario is worrying me a bit. I think the government is going to try to spend their way out of this mess with bailouts, new government programs and defense spending, etc… All of these will devalue the currency and would be inflationary. I hope I’m wrong…
January 29, 2008 at 3:39 PM #145034blahblahblah
ParticipantThis is a very interesting topic and I’ve been thinking about the same thing. If interest rates go back up, home prices will need to come down. However, interest rates won’t go up unless we are in an inflationary environment. In an inflationary environment, salaries will increase too so that will put upward pressure again on home prices. It could very well be that the guy who buys today at a 20% nominal discount from the 2005 peak with a very low fixed interest rate could come out ahead of someone buying two years from now with a much higher rate, even though the nominal price might fall a bit between now and then.
I’m as much of a bear as anyone, but just such a scenario is worrying me a bit. I think the government is going to try to spend their way out of this mess with bailouts, new government programs and defense spending, etc… All of these will devalue the currency and would be inflationary. I hope I’m wrong…
January 29, 2008 at 3:39 PM #145032blahblahblah
ParticipantThis is a very interesting topic and I’ve been thinking about the same thing. If interest rates go back up, home prices will need to come down. However, interest rates won’t go up unless we are in an inflationary environment. In an inflationary environment, salaries will increase too so that will put upward pressure again on home prices. It could very well be that the guy who buys today at a 20% nominal discount from the 2005 peak with a very low fixed interest rate could come out ahead of someone buying two years from now with a much higher rate, even though the nominal price might fall a bit between now and then.
I’m as much of a bear as anyone, but just such a scenario is worrying me a bit. I think the government is going to try to spend their way out of this mess with bailouts, new government programs and defense spending, etc… All of these will devalue the currency and would be inflationary. I hope I’m wrong…
January 29, 2008 at 3:39 PM #145006blahblahblah
ParticipantThis is a very interesting topic and I’ve been thinking about the same thing. If interest rates go back up, home prices will need to come down. However, interest rates won’t go up unless we are in an inflationary environment. In an inflationary environment, salaries will increase too so that will put upward pressure again on home prices. It could very well be that the guy who buys today at a 20% nominal discount from the 2005 peak with a very low fixed interest rate could come out ahead of someone buying two years from now with a much higher rate, even though the nominal price might fall a bit between now and then.
I’m as much of a bear as anyone, but just such a scenario is worrying me a bit. I think the government is going to try to spend their way out of this mess with bailouts, new government programs and defense spending, etc… All of these will devalue the currency and would be inflationary. I hope I’m wrong…
January 29, 2008 at 3:39 PM #144766blahblahblah
ParticipantThis is a very interesting topic and I’ve been thinking about the same thing. If interest rates go back up, home prices will need to come down. However, interest rates won’t go up unless we are in an inflationary environment. In an inflationary environment, salaries will increase too so that will put upward pressure again on home prices. It could very well be that the guy who buys today at a 20% nominal discount from the 2005 peak with a very low fixed interest rate could come out ahead of someone buying two years from now with a much higher rate, even though the nominal price might fall a bit between now and then.
I’m as much of a bear as anyone, but just such a scenario is worrying me a bit. I think the government is going to try to spend their way out of this mess with bailouts, new government programs and defense spending, etc… All of these will devalue the currency and would be inflationary. I hope I’m wrong…
January 29, 2008 at 3:53 PM #145026Aecetia
ParticipantFYI-
The tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury.
January 29, 2008 at 3:53 PM #145123Aecetia
ParticipantFYI-
The tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury.
January 29, 2008 at 3:53 PM #144786Aecetia
ParticipantFYI-
The tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury.
January 29, 2008 at 3:53 PM #145052Aecetia
ParticipantFYI-
The tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury.
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