Will low rates lock up austin housing market over the next decade? (2013, refinance)

[suit-n-tie white guy]

Once in a lifetime rates so good that no one will want to ever sell their houses. Will this phenomena freeze the pre-2013 built housing ma buying am experket for the next 15 years? Why would anyone ever sell what they have and buy back into rates of 10% or more? Are the days of move up buyers over when the rates climb? Houses paid off and all others paid for cash afterwards . Thats my plan and im nit the only one. I plan to pay off in 10 year save cash for the next one

[atxcio]

Well, logic would dictate that when rates creep back up, there will be some downward pressure on prices (unless of course there is across the board inflation, including in salaries). So people won't stop moving, but the "sweet spot" of affordable monthly payments will cause some prices to come down.

Regardless, though... buying a house in cash when rates are at such historical lows is a really bad idea. It's almost financial malfeasance, if you carry any other existing debt whatsoever (which will have a higher percentage rate), or even plan on carrying debt in the future for anything (cars, credit cards, school, etc). All of those would be better places to put your cash than in a home when you can get such cheap financing.

Please do check with a financial planner before making such a decision.

[GreenPlastic]

I think the opposite...it's adding liquidity to the market. If you own now, you don't necessarily have a great rate depending on when you bought and if you have refinanced. Also, if you sell now, it makes sense you will also buy now and the interest rate risk is mitigated to a great extent.

It's a great time to upgrade and I think many people are doing so.

[CptnRn]

Originally Posted by suit-n-tie white guy

Once in a lifetime rates so good that no one will want to ever sell their houses. Will this phenomena freeze the pre-2013 built housing ma buying am experket for the next 15 years? Why would anyone ever sell what they have and buy back into rates of 10% or more? Are the days of move up buyers over when the rates climb? Houses paid off and all others paid for cash afterwards . Thats my plan and im nit the only one. I plan to pay off in 10 year save cash for the next one

"housing ma buying am experket for the next 15 years?"

"and im nit the"

???

[suit-n-tie white guy]

My smart phone butchers my posts every once ina while.


housing market for the next 15 years

thats the english version

[Trainwreck20]

Eh, I remember (although I was too young to own a house ) when interest rates were 10% plus. People still bought houses. At some point it will affect the amount a house can sell for (depressing prices), but when ya gotta move, ya gotta move.

[GreenPlastic]

Okay, I think read your question incorrectly. I guess you mean down the road when rates eventually rise. As someone pointed out, prices should adjust til an equilibrium is met.

[suit-n-tie white guy]

Originally Posted by GreenPlastic

Okay, I think read your question incorrectly. I guess you mean down the road when rates eventually rise. As someone pointed out, prices should adjust til an equilibrium is met.

So if prices adjust and homes are going to lose inflation-adjusted value then how are the people buying now going to unload their houses and walk away with any significant profit to roll into the next house???? The underwriters only want to know how much the house is worth, and how much it selling for. they dont care if interest rates are 3% or 15% or what effect that has on the monthly payment. The people buying now will basically need to pay off the house and bring all cahs next time or get bent over when the try to trade up in a 15% loan environment. THey wont want the new 15% rate after paying 4% for the last decade. They wont have the equity they were planning on. The lock-step rate increase from now on will cap the prices. People buying now out of panic are going to have real regrets if they find out they didnt really like the house as much as they thought they did.

[Trainwreck20]

15% loan environment.

When was the last time we were there? Not saying it can't happen, but it is more likely a 6-7% peak loan rate. It was 10-12% (IIRC) in the late 70s. People had bought at much lower rates prior to that, yet the housing market did not freeze up.

I am not an economics expert by any stretch, but for 15% rates to exist, there would have to be hyper inflation, which would affect your pay, as well.

[suit-n-tie white guy]