Not necessarily. If rates go up and prices go down, solution would be to make fixed-rate loans assumable. So that people could “sell” their homes by transferring the note vs going through the process of short sale or foreclosure.
If the monthly nut is lower (function of loan rate and balance) than you can pay at current prevailing home prices and rates for new loans, some buyers will do it, with the assumption that prices will rise again eventually or that it will pencil out as a rental. It was quite common in the 80s, and the only way some people could buy with rates being in double digits.
Articles like this one that are printed every day are just silly.
The writers are repeating govt propaganda.
Opinions are expressed as facts, details are misleading, individuals are mentioned to support their idiotic claims, and the worst part is that people believe and quote the misinformation as though it is verified.
There was a huge refi boom through May 2013, but I do not believe that the majority of fixed loans today are sub 4%.
Only a small % of savvy people played the game of multiple refi’s all the way down.
Adjectives used in all articles are subjective & opinions
“Soaring, tight, potential, undermining” etc
What is the definition of ‘housing recovery’ ?
Back to the highs of subprime & no doc loans??
the houses were never really worth those levels, it was only the easy financing that pushed prices.
Most people are delusional about housing, including experts & policy makers.
It’s pathetic & sickening.
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