Rate hike! (Avon: 2013, insurance, crime)

[Lookout Kid]

Originally Posted by RJA29

The rental market will see the opposite -- it will rise. With no new housing starts (if the market is cooling off) rental prices will go up even further. It's not just about the assessed value of one's house, but what that gets the individual who buys. Sure, there will always be some people underwater -- just like there will always be some who rent and have to move b/c it gets too expensive.

NPR just ran a story about massive demand for single family rentals in most metro areas, which is a new phenomenon. Traditionally the rental sector has been more concentrated in attached housing like apartments. Rents are going up very quickly, and rent increases make home ownership more appealing. Investors are starting to snatch up low-cost single family houses to convert to rentals.

Even in a Great Recession housing crash scenario, most people come out ahead owning a house over a 30 year period instead of renting. It's still the primary way that Americans build wealth over time. You might come out ahead if you are saving money by renting, but you'd have to be investing the difference in something like the stock market, and we all know that the VAST majority of renters are not doing this.

[RJA29]

Originally Posted by Lookout Kid

NPR just ran a story about massive demand for single family rentals in most metro areas, which is a new phenomenon. Traditionally the rental sector has been more concentrated in attached housing like apartments. Rents are going up very quickly, and rent increases make home ownership more appealing. Investors are starting to snatch up low-cost single family houses to convert to rentals.

Even in a Great Recession housing crash scenario, most people come out ahead owning a house over a 30 year period instead of renting. It's still the primary way that Americans build wealth over time. You might come out ahead if you are saving money by renting, but you'd have to be investing the difference in something like the stock market, and we all know that the VAST majority of renters are not doing this.

I'm saving money WHILE renting, buy losing money BY renting. When housing costs the same as renting, housing wins out after a short period of time, unless one needs to sell when they are underwater.

Can you link the NPR story, btw?

[Lookout Kid]

Originally Posted by RJA29

Can you link the NPR story, btw?

I heard it on the radio either last night or the night before... Maybe All Things Considered?

[Lookout Kid]

Originally Posted by Lookout Kid

I heard it on the radio either last night or the night before... Maybe All Things Considered?

It was on All Things Considered yesterday, in fact. Here is the story:

Investors Take Note That Rental Demand Is Up For Single-Family Homes : NPR

[destination-unknown]

Why mortgage rates are NOT going up now, but... - Dec. 17, 2015

[RJA29]

Thank you both - the flipside of why housing might not fall with rate increases: rental increases.

More bad news for renters - Dec. 15, 2015

[Tac-Sea]

Real estate is very local. Seattle is the number 1 market in the country right now, and we have basically a 1 month supply, where 6 months is normal. They are still building in this area, we are still in an expansion phase, but the next phase will be a down turn, though I wouldn't expect it until about 2017-2018. There is still upside in my area IMO. I could be wrong, but I'm glad I bought another house last year instead of waiting to see what happens. I'm up over 60K in one year on the house and the market is not slowing down this winter due to short supply. Limited inventory to pick from!


I'm still considering/looking to buy a couple more houses while I still can. I had a huge run up with the three I bought between late 2010 and mid 2014. But there is still upside, and I'm a buy and hold investor, so I'm more concerned with cash flow and tax benefits, and having someone else pay to maintain my house via their rent money. If the house goes up in value which it will in the long run, I'll consider that a bonus. Cash flow is KING.

[BrianHunter]

What support do you have that real wages are remaining steady or declining? To me the economy has been on a steady recovery. Gas prices are way down and the DOW is way up. I think it was a great time to raise rates.

[Mathguy]

There are two absolute truths here.

1) increasing interest rates have an adverse affect on housing markets
2) none of us know how much\fast the increase will be (or not)

*shrug* we were supposed to have $500/barrell oil and $3,000/ounce gold by now.

[Ophidian14]

Originally Posted by BrianHunter

What support do you have that real wages are remaining steady or declining?

2014 Continues a 35-Year Trend of Broad-Based Wage Stagnation | Economic Policy Institute

To me the economy has been on a steady recovery. Gas prices are way down

Gas prices are way down because the Saudi's are trying to price out the frackers. Once they're dead we'll be back at $4 in no time.