Even less people are buying homes, but prices won’t drop and mortgage are rising. Great. Seems like a healthy system.
I mean… it happens like this at the end of every credit cycle.
The most desperate sellers take price cuts. Prices slowly come down a teeny bit while inflation eats away at the affordability problem and rates gradually fall back down.
In 3 years the market will be healthy again.
Anyone that bought when rates were still 2-3% isn’t selling unless they’re being forced. Why would they, considering their real interest rate is negative at this point.
This is a non-headline because it’s reporting on something that was expected to happen when interest rates rose.
That being said, this does suck for those who have yet to purchase their first home. Property investors buying with cash have no incentive to stop buying. This is where government should step in and regulate. Those conversations should be headlining instead.
What property investors are buying with cash? The extreme leveraging is one of the main things that makes real estate investing attractive.
I think folks might be confused about the term “cash offer” when buying/selling houses. This generally doesn’t mean that someone is literally buying the property without debt involved, but that they can make the purchase without involving the mortgage process. Usually with a line of credit or similar funding.
oh thank goodness we’re no longer in a financial crisis. Im sure people not having homes shouldnt be a metric for what constitutes one. As long as the rich people are still making money.
The buyer pressure was largely rental buyers, and they are completely out building up capital for a collapse. That’s my read on this.
So, buy now and have high interest rates, or wait til they drop and have to compete with dozens of other people, and pay 10-20k above asking?
Paying above asking will cost a lot less than an extra 4% over 30 years.
What if you just refinance when the rate drops
Overbidding at the start of a run up in prices is a lot less risky than overbidding at the top of the cycle.
Unfortunately it’s hard to tell where you are except in hindsight.
Nice burrito bro
Thank you so much
