You've been posting that a recession is coming every month for years now. I guess eventually you will be right.
Personally I’ve always leaned to the better safe than sorry aspect of inflation so I have not been one pining for a rate cut. Having said that inflation has been normalized for about 2 years now, ignoring CPI housing impacts.
I am far from a MAGA but again, Kamala is traveling the country and between giggles is telling us that once elected she has a plan to get inflation under control. Now except for her saying she is going after the “price gougers”, Harris has given no other insight into what exactly her plan is. The fact is she has no clue on the economy as clearly evidenced by the record setting inflation we’ve seen under her and Biden and there is nothing to give Americans any confidence Harris can help fix the issue in the future.
She could be a complete idiot on the economy and still perform head and shoulders against the failed businessman/successful rapist.
Poster's insistence that inflation was caused by the current admin. only bears out the ignorance of the MAGA talking points. Poster must explain the mechanism of the Biden admin. policies to cause the current GLOBAL inflation levels, and then postulate how, upon causing the world-wide inflation, it simultaneously allowed for the US to suffer inflation at significantly lower rates. This should be good.....
With the housing supply issue I don’t think rate cuts will do that beyond the short term - it will just result in higher home prices over the long term.
While the highest in 40 years the inflation rate of slightly over 9% for a few months in 2022 wasn't remotely close to "record setting". It was at or near double digits in 1973-74 and again 1979-80.
We know there is demand out there. But problem is too many new homebuyers are currently priced out of the market. Especially because people who own starter homes are priced out of upgrading. A rate drop will help more people afford upgrades, which will open up more starter homes that people waiting to buy will now be able to afford. I don't see price drops because of this, because I doubt a .5% rate cut will cause a flood of homes on to the market. But I can see price stabilization, especially in the short term.
Obviously this is market specific but in my market prices realistically start around $650K for an existing single family home and prices have been stable for about a year now. I believe an interest rate cut would spur more demand and tilt the market deeper back into a seller’s market and we’d just see a trade off of exchanging interest for greater principle payments. IMO, the best way to alleviate pressure is to spur building more entry level homes. Around me the new houses are not “starter homes,” but starting in the 700s which is impossible for most.
In the greater Phoenix area, we've actually seen some price drops recently. About 4% YOY The problem is there is a ton of demand out there, but at current price points, not enough people can afford the homes. So, in order to sell, people drop the price. A rate drop would allow more people to afford a house without dropping the actual price of said houses. Agreed that building new residences will help as well. But so will a rate drop.
Rate drop will make more people interested in buying the same number of homes. There is nothing that will lower house prices other than building more. Even a recession is only a temporary reduction in housing demand. People have to live somewhere and there are not enough dwellings being built.
I disagree. There are homeowners with a desire to move, but simply cannot afford the upgrade. These people are holding pat, because they have no other option. Lower the prices of houses and allow these people to move, and supply increases. My wife and I have no desire to move, but we bought over a decade ago. But even if we wanted to upgrade, it would mean giving up our 3% loan for one that is significantly higher. And even with all our equity, because of interest rates, we likely couldn't afford a better house. So why move? But if/when interest rates drop, we likely could afford an upgrade. And someone in a similar situation in a starter home could likely sell it and buy ours. Which would open up a new starter home to be back on the market.
It’s a double edged sword. A rate drop would open up both supply and demand. Ultra low rate mortgages have a very long tail regarding inflationary impact. I agree without more housing prices won’t really drop that much regardless of rates.
Agreed. Generally, competition should have resolved this… but we are in a M&A vertical integration trend. So the question is… are Lina Khan and others right that government needs to step in and “Teddy Roosevelt” this economy?
This is scary, but our lefties here will just shrug it off like everything else. Cackling Kamala is a non-democratic socialist communist. They love that shit and hate America as founded.