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re: Will the anticipated 3 rate cuts jump-start residential home sales this year?
Posted on 3/22/24 at 4:06 pm to Gravitiger
Posted on 3/22/24 at 4:06 pm to Gravitiger
quote:
Maybe I'm just an economic dumbass, but it seems like, in modern market history, mortgage rates and home prices seem to roughly balance each other out, when it comes to total monthly payment.
They typically have an inverse relationship yes, but the question is will home prices decrease enough to offset the higher interest rate?
For this last rate hike the answer to that was a resounding no. House prices didn't move much.
1
Posted on 3/22/24 at 7:04 pm to rintintin
quote:
Maybe I'm just an economic dumbass, but it seems like, in modern market history, mortgage rates and home prices seem to roughly balance each other out, when it comes to total monthly payment.
They typically have an inverse relationship yes, but the question is will home prices decrease enough to offset the higher interest rate?
For this last rate hike the answer to that was a resounding no. House prices didn't move much.
That assumption assumes adequate inventory. We don't have that, for several reasons. Prices won't be coming down significantly until the supply side is back in balance (new home stock, waves of foreclosures, etc.).
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