notfbi
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https://www.nature.com/articles/s41467-024-49753-5
which for that factoid links to
https://pubs.acs.org/doi/10.1021/acsenergylett.1c02602
which for that just links to a BBC article with a doctor saying the "value everyone quotes is about"
If home prices don't fall in unison with increased rates sufficiently then of course monthly mortgage payments (or imputed rent) goes up and affordability metrics worsen.
I don't think this is making economists scratch their head so much, if so it's like how "experts don't know how the pyramids were made" -- we know many ways it could happen, we just can't prove which one. Even in the simplest model of valuation, it's not the current interest rate that determines the home prices, it's the full expected rate over the lifetime of the asset. Of course if interest rates are 5% today but expected to be 1% next year, the price will be based mostly on the 1%. The longer term bonds and hence longer term mortgage rates can capture a consensus expectation, but there can still be divergence of expectations by the marginal seller. My dental hygienist on selling her house "The government needs to cut rates back so that people can afford to buy my house" with unsaid portion as I heard it "at my arbitrary zero-interest-rate-phenomenon based expectation of value".
With very little additional detail, this says it's worse than 2015: https://foodinstitute.com/focus/bird-flu-cull-surpasses-2015...
In areas where developable land is very plentiful - rural, deserts, minimal environmental/nimby protections, etc. - land prices will remain low and house prices should be constrained by building costs. In the same way that we don't expect TV or car prices to go up very much with lower interest rates, even though you consume durable goods over 20years, as competition holds the prices to what it costs to make rather than how you benefit from them. Over the long term, it used to be that house prices tracked construction costs pretty well.
However in areas where the fixed quantity of land is binding - urban, or areas with stringent protections and managed growth policies - land and house prices will be bid up to what people can afford via monthly payments, and will therefore respond greatly to interest rates (and IR expectations)
Further add on that high property taxes in some regions can dilute the costs associated with financing changes (if interest rates increase from 1 to 2%, but you're paying 5% in property taxes, that's only a 7/6% increase in your costs)
edit: to summarize, where supply is elastic, interest rate reductions should cause quantity supplied to increase, price to remain the same, and monthly costs to decrease. Where supply is inelastic, the quantity stays the same, monthly payments stay the same, price increase. We've possibly moved into an environment with more supply inelasticity in recent history.
2. LVT is mostly about redistributing rents, with the land use efficiency bonus as a big second order benefit.
3. Professions aren't exclusionary. A person doesn't squat on their teacher gig for 20 years in order to see how their claim on being 1 of finite-X allowed software developers might rise in price. Other people would just become software developers.
Can you share where it is best thoroughly debunked? The stuff linked so far in this thread (Friedman podcast; pilot Lehto analysis) isn't good.
If venting is instead a coalitions/tribal consensus building exercise, the psychologists might need to wait until after the revolution to retest the subject's well-being.
[1] https://api.parliament.uk/historic-hansard/written-answers/1... [2]https://ourworldindata.org/grapher/nominal-wages-consumer-pr...
Many factual points in the introduction, with the modest apartment, income in today's value, and her own regard of wealth frame it as if she's relatable middle-class.
They rented a fourth-floor walk-up apartment in London with four bedrooms, two sitting rooms, and a “nice outlook on green.” The rent was £90 for a year ($530 per month in today’s dollars). To keep it tidy, they hired a live-in maid for £36 ($2,600) per year, which Christie described as “an enormous sum in those days.”
The couple was expecting their first child, a girl, and they hired a nurse to look after her. Still, Christie didn’t consider herself wealthy. "
Ignoring the point and rest of the article but it's a strange and uncanny framing to start it, while simultaneously giving the true numbers, trying to suggest that Agatha Christie in this circumstance of having income 25x that of the working class might not be considered well-off.
- Roads/cars often leads to the phenomena of something like grid-lock. A network might be able to throughput 100 cars a minute when only <=100 cars are trying to get through, but try 101 and it starts dropping: If 120 cars attempt passage at once, congestion actually causes the throughput to drop to like 80 (think of those backward-propagating traffic-wave videos). If 150, throughput drops to 70 etc.
- You can add more roads/highways but if it doesn't address certain chokepoints, that throughput will still start descending at some point (though maybe a bit higher now like 110 cars/minute).
- Sometimes you can address the chokepoints, but after some expansion the remaining chokepoints are essentially having the buildings and city intersections themselves, at which point you can only address the bottleneck by rebuilding buildings further apart, which leads to a cycle of worsening pedestrian access, local-depopulation, and more cars.
- And then finally, maybe bikes are different in that they are small and agile with a congestion-failure-mode of being walked. It's hard or unlikely to get to a bike usage level that would lead you to want to move buildings very far apart to support them.
- Or maybe bikes are just simply so small that the preferred distance between buildings anyway (for sun light, privacy) can support most realistic biking numbers (which would be limited by density limits anyways: elevators only practically go so high, commuting biking trips can only be so far).
- Ultimately I wish there as a bit more explained here, maybe by someone that designs traffic/city simulations if that's how the best cost/benefits are tested now. It's really confusing that urban planning advocates concentrate on the un-improving car-trip-time/congestion KPIs like it's a dunk when it really seems some throughput-capacity utility metric would be more important.
This might make sense: if users were knowledgeable and had multiple brokers, they may execute at the better trade-specific broker for each trade, so adding up just the potential bads gives some perspective. But on the other hand, it's not a perfect indicator for Robinhood's net gain as its omitting trades where Robinhood's structure leads to lower commission.