Re:Americans Have Never Been So Unwilling to Relocate for a ...
by ryanSrich on Wednesday May 17, 2023 @04:29PM
(#35980864)
> You sell your existing house, which has benefited from inflation
Your new interest rate is going to absolutely demolish any inflation benefit your current house has. I don't think people really understand how bad higher interest rates are when there's a housing shortage.
- A $500k house at 3% is $2,100/month.
- A $500k house at 7.5% is $3,500/month
- That's a difference of nearly $17,000/year
The house that was $500k at 3% in 2021 is still $500k at 7.5% in 2023. Housing prices haven't budged. We'd need to see a 20-40% reduction in prices across the board to stabilize affordability, but that won't happen because there's too much demand.
Your new interest rate is going to absolutely demolish any inflation benefit your current house has. I don't think people really understand how bad higher interest rates are when there's a housing shortage.
- A $500k house at 3% is $2,100/month.
- A $500k house at 7.5% is $3,500/month
- That's a difference of nearly $17,000/year
The house that was $500k at 3% in 2021 is still $500k at 7.5% in 2023. Housing prices haven't budged. We'd need to see a 20-40% reduction in prices across the board to stabilize affordability, but that won't happen because there's too much demand.