Re:Mortgage Rates Could Tank Home Prices by 20%, Fed Study F...
by A4ET8a8uTh0 on Wednesday November 16, 2022 @01:14PM
(#33627800)
It is not just ok, but it is necessary. The prices are artificially high due to partially FED insistence on stupidly low rates for much longer period than it was reasonable.
My personal anecdata, our house practically doubled in value since we bought it over 5 years. That is not normal. That price needs to go down. The liquidity here is imaginary just like liquidity in just about anything else. It is worth what people are willing to pay for it.
Finally, the change in rate will mean that they will be willing to pay less, because it will be harder to borrow more.
Re:Mortgage Rates Could Tank Home Prices by 20%, Fed Study F...
by bryanlarsen on Wednesday November 16, 2022 @02:55PM
(#33629542)
Sorry, poor phrasing. Yes, the prices need to come down. That causes secondary problems and we should fix the secondary problems themselves rather than propping up the price.
Re:Mortgage Rates Could Tank Home Prices by 20%, Fed Study F...
by yucky on Wednesday November 16, 2022 @01:41PM
(#33628273)
> This isn't a normal market and regulators need to step up.
- people get stuck in a house because moving would cause them to lose the favorable rate they currently have. Everybody would benefit from some measure of mortgage portability -- the producer, the consumer, the mortgager, the mortgagee but instead we have this massive deadweight loss.
- price drop causes house building to drop dramatically. We're in such a mess today because builders stopped building in 2008.
In a normal market you'd be right. This isn't a normal market and regulators need to step up.