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It's still about supply vs. demand. In the Great Recession, there was an excess of speculative inventory which tipped the balance. It's different now. Pandemic supply issues and labor constraints continue to restrict supply in the face of growing demand. Younger people are doubling up, living with parents etc. They represent a pent up, unmet demand. The way to lower prices is more construction of homes and apartments but higher interest rates from the fed are doing to stifle that. It's a complex picture, but this is not 2008 all over again.
I think this factor is why we won't see the drop fall like it did in 2008-2011 so I expect a lesser crash in the housing market compared to 2008.
It's still about supply vs. demand. In the Great Recession, there was an excess of speculative inventory which tipped the balance. It's different now. Pandemic supply issues and labor constraints continue to restrict supply in the face of growing demand. Younger people are doubling up, living with parents etc. They represent a pent up, unmet demand. The way to lower prices is more construction of homes and apartments but higher interest rates from the fed are doing to stifle that. It's a complex picture, but this is not 2008 all over again.
It's not 2008 all over again because there will be different reasons for the next downturn, as there often are from one downturn to the next. Right now, we have an inventory problem, there aren't enough homes on the market. But we also have an inflation problem, as you have noted.
Because of the inflation problem, the 10 year treasury rate is on the rise, resulting in the rise of the 30 year mortgage rate, which is rapidly approaching 6%. I'm paying 2.8% from just about 1 year ago. If this continues at the current pace, we will see demand fall, and as a result, our (lack of) inventory problem will no longer be a problem.
If it is sustained for long enough, prices will fall. How much, remains to be seen, but it depends how much more rates rise and for how long. Long enough, and we may have a glut of homes on the market, rents will rise and home prices will fall until a new equilibrium is reached.
So yes, not the same reasons as 2008, same results.
I don't think you comprehend what you are posting, because you are framing it as total mortgage payments.
Just to be clear, you are posting "interest" from mortgages. Not total mortgage payments.
This statistic has fallen due to lower interest rates at historic lows coupled with refinancing.
However, your own source agrees with me. Homes are becoming more expensive to buy. Once again, the St. Louis Fed says home affordability is getting worse. In fact, your source says homes are 23% more unaffordable compared to one year ago.
The mortgage interest rate doubled under Biden and homes rose in price.
Sorry to all of you people who are suffering the effects of the rising interest rates, but they are music to my ears, they can't rise fast enough for me.
I will be house hunting in May or June and the higher rates will eliminate much of the competition. While prices probably won't be starting down, but it should eliminate or slow the bidding wars that really jack up the prices. You can't expect to purchase a property for the asking price, it could go much higher before sold, that means you have to shop for a home $25-50 k below your max and hope for the best. A very frustrating time to be a buyer.
It is worth noting interest rates are around where they were 3-4 years ago.
It is worth noting that home prices are about 30 up percent over the last 4 years.
You do realize that monthly payments are impacted by the interest rate AND loan amount?
This is why the St. Louis Fed says that home affordability has took a 23% turn for the worse.
Let's be honest and not do political BS spin. It is harder for more and more people to buy a home.
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