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In my opinion you will have seen the recent flurry of activity cool off and I have a few reasons.
1) Most buyers were people people who sat on the sidelines and were waiting for their time. These people are unlimited and quite limited to people with cash and good jobs.
2) The job market while getting better is still soft.
3) The spring season is almost over and summer is almost here.
4) Higher rates never help the Real Estate Market especially in soft work market.
5. The market may correct and people may lose some net worth very shortly.
Again just my opinion but time will tell. Of course realize I have no skin in the game and most realtors have been saying for the past 5 years now is the time to buy. Rather I am an amateur investor who has an opinion.
I also think that if prices drop, sellers will pull back, which will mean even less product available to buy in an already undersupplied market. So for the stuff that will be listed there will be even more buyers chasing it, which will keep prices high. Just because rates go up doesn't mean sellers will eager sell at a lower price....they may just decide to wait it out as well and in that case you have a frozen market. It will be interesting to see what happens. Glad I made my move when I did...I got a 2% rate through my brokerage house and bought at a great basis when most were still waiting for prices to fall further...they didn't.
According to MiamiLife if rates go up people will not sell houses in fact they will cook them and eat them. Why do his opinion smell of self interest? Hmm?
I also think that if prices drop, sellers will pull back, which will mean even less product available to buy in an already undersupplied market. So for the stuff that will be listed there will be even more buyers chasing it, which will keep prices high. Just because rates go up doesn't mean sellers will eager sell at a lower price....they may just decide to wait it out as well and in that case you have a frozen market. It will be interesting to see what happens. Glad I made my move when I did...I got a 2% rate through my brokerage house and bought at a great basis when most were still waiting for prices to fall further...they didn't.
I dont agree. I think there is a lot of pent up demand to sell. People with a decent house they can afford, who have been holding off on selling for years due to the "bad" real estate market
According to MiamiLife if rates go up people will not sell houses in fact they will cook them and eat them. Why do his opinion smell of self interest? Hmm?
In my years of investing in various markets, I have learned a vast amount of information that culminates down to one thing that I am absolutely sure about...
The price is either going to go up, or it's going to go down.
I bet the house prices will come down. Who can afford these high price houses with high interest rates when the salary hardly increased? Unless they are still making 40, 50 year mortgages, i don't see prices stay this levels.
For the average joe, it's all about the payment, something need to offset the higher interest rates, and that's house prices or household income.
House prices will temporarily retreat as interest rates rise. It's a natural market reflex. Eventually both interest rates and house prices will rise. Interest rates will rise much faster than house prices. My bet is that you will have seen 30 yr fixed rate mortgages at 6%+ by this time next year(which is where they will level off unless we get into a hyper inflation situation). It would take a 20% drop in prices to make up for the lost buying power that the new interest rates will carry. Considering the market already had a 20% correction less than 5 years ago I'd say that is unlikely.
articles im reading today are saying the housing numbers will show a big hit due to the higher interest rates. it may take a couple of months to really show; but they said it will.
i also read one about the mortgage interest tax deduction possibly being phased out. it mentioned that the real estate lobby had spent something like $81 million in 2012 in order to protect that and various interests of theirs. you don't spend $81 million on politicians unless you expect to be buying their support.
articles im reading today are saying the housing numbers will show a big hit due to the higher interest rates. it may take a couple of months to really show; but they said it will.
i also read one about the mortgage interest tax deduction possibly being phased out. it mentioned that the real estate lobby had spent something like $81 million in 2012 in order to protect that and various interests of theirs. you don't spend $81 million on politicians unless you expect to be buying their support.
The mortgage interest tax deduction may hit the real estate market much harder than an increase in rates. If the rates are expected to only go higher, then the people who want to buy should still buy. But take away the tax deduction and the buy vs rent calculations can tot. change. Higher mortgage interest + not being able to deduct = more people sitting out or reducing their budget
The mortgage interest tax deduction may hit the real estate market much harder than an increase in rates. If the rates are expected to only go higher, then the people who want to buy should still buy. But take away the tax deduction and the buy vs rent calculations can tot. change. Higher mortgage interest + not being able to deduct = more people sitting out or reducing their budget
That's why it will never happen. It would crash the real estate market worse than 2007. It would lead to another recession. That's why nobody takes that "suggestion" very seriously. You would have to lower income taxes substantially in order for it to be realistic, and even then...
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