Quote:
Originally Posted by BleedingRed
The problem with rates being back to "normal" is housing costs are way out of whack with these "normal" rates.
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well youre not talking costs, youre talking PAYMENTS.
theres 2 ways to look at it. I think youre looking at it wrong, and in a temporary slice of time (right now) versus the intended and needed direction it is going.
Lets look back to a year ago, before the rate hikes:
youve got 2% interest rates and no one caring about how much a house "costs" because they can afford the
payments. But IMHO you and everyone else looking at it like this were/are wrong.
We arent finished raising rates yet. It is correct that no one can afford the PAYMENTS when the rate is normal (7%). But just take a staep and ask yourself why. Its because the COSTS are too high. Houses shouldn't be this high, and thus the cost will go down. The only reason they ever got that high in the 1st place is because of 2%-3% mortgages and a ton of excess liquidity.
I would much rather buy a house at a good cost with a higher interest than WAY too high of a price but you get suckered in with a low payment.
Prices will go down, it might take 4-5 years for this to happen, but it will. Or they wont rise as fast. But we cant have everything inflating at a crazy speed...so we need to normalize rates.