they will never be above 5% again. 15yrs in the mortgage insudstry and i have learned this. in 2008 the govt proped the values up and the killed high interest rates forever. You cant build houses at $200sqft if the rates at 5-7%. No one wants to loose 50% of the vaule of there house in a correction and that would have to happen to everyon that bought since 2008. Sit back enjoy the cheap rates and the expesive house. its the new norm.

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Posted by USMEagles

Member since Jan 2018

11811 posts

Posted on 9/10/20 at 2:44 pm to hawkeye007

quote:
they will never be above 5% again. 15yrs in the mortgage insudstry and i have learned this. in 2008 the govt proped the values up and the killed high interest rates forever. You cant build houses at $200sqft if the rates at 5-7%. No one wants to loose 50% of the vaule of there house in a correction and that would have to happen to everyon that bought since 2008. Sit back enjoy the cheap rates and the expesive house. its the new norm.

The other things that plays into that is that circa 2008, the Fed did this "quantitative easing" thing where they just printed a bunch of money and gave it to banks to hold onto for a rainy day. That hasn't translated to inflation because it's mostly just sitting there "shoring up" the banks' balance sheets. But it does keep interest rates low since there's no shortage of money to lend.

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Posted by Sneaky__Sally

Member since Jul 2015

12364 posts

Posted on 9/10/20 at 2:52 pm to hawkeye007

quote:
they will never be above 5% again. 15yrs in the mortgage insudstry and i have learned this. in 2008 the govt proped the values up and the killed high interest rates forever. You cant build houses at $200sqft if the rates at 5-7%. No one wants to loose 50% of the vaule of there house in a correction and that would have to happen to everyon that bought since 2008. Sit back enjoy the cheap rates and the expesive house. its the new norm.

It is worth pointing out that definitive statement like this inevitably prove false.

We were supposed to have solved market volatility in the era of great moderation, the housing market ALWAYS went up before 2008.

In the current format, you are probably right - but I feel like the last 30 years or so have taught us that we should be expecting dramatic shifts in markets due to unprecedented events about every 10 years or so.

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