Re:Low interest rates in advanced countries have pushed mone...
by dillondoyle on Wednesday November 24, 2021 @05:11PM
(#29335769)
I had the same thought but would add there aren't many variable interest rate home loans anymore? If any?
This source [1] also says HELOCS or 2nd mortgages are only 8% of owners, 1/2 of what they were in 2009. But that was 2018 maybe pandemic upped the %.
So to get another 2007 meltdown this thesis would be that a lot of people would have to lose their jobs first. Interest rates going up wouldn't matter if they make the same (or more) money.
But could argue collapsing real estate values would cause weak job market.
[https://www.socialexplorer.com/blog/post/once-viewed-as-easy...]
Re:Low interest rates in advanced countries have pushed mone...
by nwatson on Wednesday November 24, 2021 @05:21PM
(#29335854)
But all the savvier investors will sell the inflated assets at higher prices before the dip/fall and go on to use their increased capital to over-inflate the next hot asset class to the detriment of the average Joe.
I'm not so sure - it depends on how heavily leveraged buyers are and what % of them have used price increases to secure more capital. If your home has significantly appreciated in value but you haven't taken equity out of it, it could be said that you were leaving money on the table but only if you knew of a better investing opportunity. If you just let the property appreciate and didn't securitize that gain, a decline from peak values doesn't hurt because you have no loan to service.