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Huckleberry
ParticipantI have to side with CAR on all accounts in this thread…
ParticipantI have to side with CAR on all accounts in this thread…
ParticipantI have to side with CAR on all accounts in this thread…
Participant[quote=Effective Demand]Regarding interest rates and housing prices.
The issue is WHY rates are high or low. Rates are high because of high inflation or high growth, Rates are low because of low inflation (or deflation) or low growth. If you put high rates in a low growth scenario, it would no doubt effect housing prices, just as low rates in a high growth scenario would.[/quote]
This is exactly spot on! That is why this time is different than in the past…
Participant[quote=Effective Demand]Regarding interest rates and housing prices.
The issue is WHY rates are high or low. Rates are high because of high inflation or high growth, Rates are low because of low inflation (or deflation) or low growth. If you put high rates in a low growth scenario, it would no doubt effect housing prices, just as low rates in a high growth scenario would.[/quote]
This is exactly spot on! That is why this time is different than in the past…
Participant[quote=Effective Demand]Regarding interest rates and housing prices.
The issue is WHY rates are high or low. Rates are high because of high inflation or high growth, Rates are low because of low inflation (or deflation) or low growth. If you put high rates in a low growth scenario, it would no doubt effect housing prices, just as low rates in a high growth scenario would.[/quote]
This is exactly spot on! That is why this time is different than in the past…
Participant[quote=Effective Demand]Regarding interest rates and housing prices.
The issue is WHY rates are high or low. Rates are high because of high inflation or high growth, Rates are low because of low inflation (or deflation) or low growth. If you put high rates in a low growth scenario, it would no doubt effect housing prices, just as low rates in a high growth scenario would.[/quote]
This is exactly spot on! That is why this time is different than in the past…
Participant[quote=Effective Demand]Regarding interest rates and housing prices.
The issue is WHY rates are high or low. Rates are high because of high inflation or high growth, Rates are low because of low inflation (or deflation) or low growth. If you put high rates in a low growth scenario, it would no doubt effect housing prices, just as low rates in a high growth scenario would.[/quote]
This is exactly spot on! That is why this time is different than in the past…
Participant[quote=GH]Just keep in mind that housing prices and interest rates have no relationship
Nonsense! Prices are falling today because at ANY interest rate very few can afford, and there are millions of foreclosures out there dropping prices. Credit scores are all but trashed these days, incomes are off and frankly no matter the spin prices ARE falling. If interest rates were raised to say 15% prices would fall massively as far fewer of the dwindling supply of credit qualified applicants could qualify for $500K at 15% than could qualify at 5%.
Assuming 10% down, your monthly payment incl tax will be ~3,000 /MO at 5% and ~6,200 /MO at 15%, so obviously many can afford the $3,000 payment but very few could afford the $6,200 payment.
This is simple math and not subject to opinion![/quote]
I concur with this 100%! No need for anymore debate on this…
Participant[quote=GH]Just keep in mind that housing prices and interest rates have no relationship
Nonsense! Prices are falling today because at ANY interest rate very few can afford, and there are millions of foreclosures out there dropping prices. Credit scores are all but trashed these days, incomes are off and frankly no matter the spin prices ARE falling. If interest rates were raised to say 15% prices would fall massively as far fewer of the dwindling supply of credit qualified applicants could qualify for $500K at 15% than could qualify at 5%.
Assuming 10% down, your monthly payment incl tax will be ~3,000 /MO at 5% and ~6,200 /MO at 15%, so obviously many can afford the $3,000 payment but very few could afford the $6,200 payment.
This is simple math and not subject to opinion![/quote]
I concur with this 100%! No need for anymore debate on this…
Participant[quote=GH]Just keep in mind that housing prices and interest rates have no relationship
Nonsense! Prices are falling today because at ANY interest rate very few can afford, and there are millions of foreclosures out there dropping prices. Credit scores are all but trashed these days, incomes are off and frankly no matter the spin prices ARE falling. If interest rates were raised to say 15% prices would fall massively as far fewer of the dwindling supply of credit qualified applicants could qualify for $500K at 15% than could qualify at 5%.
Assuming 10% down, your monthly payment incl tax will be ~3,000 /MO at 5% and ~6,200 /MO at 15%, so obviously many can afford the $3,000 payment but very few could afford the $6,200 payment.
This is simple math and not subject to opinion![/quote]
I concur with this 100%! No need for anymore debate on this…
Participant[quote=GH]Just keep in mind that housing prices and interest rates have no relationship
Nonsense! Prices are falling today because at ANY interest rate very few can afford, and there are millions of foreclosures out there dropping prices. Credit scores are all but trashed these days, incomes are off and frankly no matter the spin prices ARE falling. If interest rates were raised to say 15% prices would fall massively as far fewer of the dwindling supply of credit qualified applicants could qualify for $500K at 15% than could qualify at 5%.
Assuming 10% down, your monthly payment incl tax will be ~3,000 /MO at 5% and ~6,200 /MO at 15%, so obviously many can afford the $3,000 payment but very few could afford the $6,200 payment.
This is simple math and not subject to opinion![/quote]
I concur with this 100%! No need for anymore debate on this…
Participant[quote=GH]Just keep in mind that housing prices and interest rates have no relationship
Nonsense! Prices are falling today because at ANY interest rate very few can afford, and there are millions of foreclosures out there dropping prices. Credit scores are all but trashed these days, incomes are off and frankly no matter the spin prices ARE falling. If interest rates were raised to say 15% prices would fall massively as far fewer of the dwindling supply of credit qualified applicants could qualify for $500K at 15% than could qualify at 5%.
Assuming 10% down, your monthly payment incl tax will be ~3,000 /MO at 5% and ~6,200 /MO at 15%, so obviously many can afford the $3,000 payment but very few could afford the $6,200 payment.
This is simple math and not subject to opinion![/quote]
I concur with this 100%! No need for anymore debate on this…
ParticipantI stand by my original post…
The consumer is de-leveraging and paying down debt, not taking on risky high priced debt, such as depreciating assets (houses).
The housing market is dependent on demand. Higher mortgage rates remove potential buyers (demand).
Diminishing demand means no pricing power = lower prices (basic economics).
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