re: Breaking: Fed leaving interest rates unchanged.

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I love where I live, but there is no way in this world my home should be worth 450k

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If that is the price the marginal buyer is willing to pay then, like it or not, that is its worth.

A person trying to buy a home will find it a little more difficult due to home prices increasing slightly more than wages, but he’ll find it even more easy due to wages increasing faster than everything else.

In short, it’s easier to buy a home because the extra amount you pay for the home is less than the savings you have on all of your other purchases.

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No we aren’t, he had opportunities to lower rates and didn’t.

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If he had lowered rates we would be frantically raising them to get to where they are now - a point at which Trump’s hand selected guy won’t cut them.

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SDVCuck told us mortgage interest rates would be in the 4's if Trump was re-elected

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Maybe they will be.

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In short, it’s easier to buy a home because the extra amount you pay for the home is less than the savings you have on all of your other purchases.

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Dude, being able to buy more ground beef for an hour of work than someone could in 1990 doesn’t automatically make a house more affordable. You still have the home price, mortgage rate, insurance, property taxes, maintenance, and down payment.

I see what you are trying to get at but it's a huge oversimplification on your part and a little bit of dummy math.

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Homes were also around 120k back then, not the hyper inflated 400k starter homes you'll find in most metro areas

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People bought 1500sq ft starter homes.

Now people out of school want 3000sq ft with every upgrade available that they see on TV makeover shows.

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Current 30 year mortgage is 6.6%.

My first home loan in 1990 was over 9% and I didn't see an interest rate below 7% until 1998.

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Most people don’t know this. The 30 year fixed didn’t drop below 7% until 2002 and it didn’t hit 5% until 2009 during QE. The mortgage rates that people saw from 2009 to 2022 are historically extremely low. It’s a gulley.

Mortgages trade like bonds. When rates go down, prices go up, and vice versa. The homes that those mortgages buy follow the same pattern.

Cheap money for 13 years got us here. All that lower rates will do is have more buyers enter the housing market who can’t afford the lowest priced homes now. The more buyers who start to be able to afford the lowest priced homes will prop up those prices.

Interest rates are demand side tools. The only fix that could get home prices down without a massive market correction is to increase supply. That’s it.

Lower rates will not make home prices drop.

Cheap money for 13 years didn’t get us here no matter how many times some on this board insist on believing it, out of control government spending got us here, nothing more.