patrick.net

"So? Look at those early 20s and mid 30s peaks!"

And we haven't built 50-60M housing units these past 3 decades? Is the boomer housing going to disappear along with the boomers?

Trump will neither own a housing crash nor runaway inflation. Prices will go up slowly is my prediction, 1-5 percent per year not more. Also house building has maintained a fairly slow pace since covid, builders are cautious amd hesitant. Not a lot of new construction has hit the market, reducing overall supply

mell says

"Trump will neither own a housing crash nor runaway inflation. Prices will
go up slowly is my prediction, 1-5 percent per year not more."

No because we are having an artificial housing bubble for the last 30 years or so going back to
Alan Greenspan. My take is that under Trump the housing bubble will collapse.

The_Deplorable says

mell says

"Trump will neither own a housing crash nor runaway inflation. Prices will
go up slowly is my prediction, 1-5 percent per year not more."

No because we are having an artificial housing bubble for the last 30 years or so going back to
Alan Greenspan. My take is that under Trump the housing bubble will collapse.

For that to happen you need a significant recession. with a lot of 3% mortgage holders losing their jobs, otherwise these 15 and 30 yr mortgages are a lock and people will stick with it. Don't see a significant recession happening under Trump. People have been calling for the collapse since this site existed and it never happened. The closest we came was 2008 but then they pumped a lot of money into the sector and it hasn't left it yet, mostly people sitting on fixed low apr mortgages. Not saying RE is a good investment right now, but no crash in sight imo

mell says

"For that to happen you need a significant recession."

No. Artificial low interest rates for 30 plus years is a fraud of gargantuan proportions
and this is coming to an end under Trump.

The_Deplorable says

mell says

"For that to happen you need a significant recession."

No. Artificial low interest rates for 30 plus years is a fraud of gargantuan proportions
and this is coming to an end under Trump.

All countries around the world practice zirp yet, what it causes is inflation and I agree with you about fraudulent, but willing to bet prices will rise around 2-3% 2025, they rose 4% in 2024. Zirp is not directly correlated with RE, just one factor. There is a chance of a significant downturn in RE if interest rates rise to double digits and beyond, not without it all else being equal imo

The_Deplorable says

mell says
"For that to happen you need a significant recession."

No. Artificial low interest rates for 30 plus years is a fraud of gargantuan proportions
and this is coming to an end under Trump.

We're at historic normal or slightly normal rates right now. As mell said the rates don't matter if people don't sell. That's where we're at. The 20-35 crowd just keeps renting. No buyer demand. Owners have good rates. The people moving is for jobs now, not location or lifestyle. That was done after 2012-2018 roughly.

If anything housing will continue to rise under Trump because if he reduces the cost of energy the cost of building plummets. No one is buying is the problem. So builders are reluctant. You're going to see a +5% or -5% depending where you live the next 4 years. Coastal areas will be down most likely and TX. No crash coming.

What would happen to the housing market and the economy at large if the mortgage rates were 28%?

Eric Holder says

What would happen to the housing market and the economy at large if the mortgage rates were 28%?

Good things, starting with large down payments and house prices falling to be affordable by savers. Also, reasonable homes, no mini-mansion inflation hedges. The paid-off house will be the goal and the norm.

HeadSet says

Eric Holder says

What would happen to the housing market and the economy at large if the mortgage rates were 28%?

Good things, starting with large down payments and house prices falling to be affordable by savers. Also, reasonable homes, no mini-mansion inflation hedges. The paid-off house will be the goal and the norm.

Are you saying that every current owner will be completely fooked?

Eric Holder says

What would happen to the housing market and the economy at large if the mortgage rates were 28%?

Houses that were bought for $500k will be for sale for $100k or even less.

AFTER those $500k houses stay frozen from the markets for as long as possible. Unless the corporate house holders dump entire neighborhood blocks that they own to get the hell out pronto. <-- this is a distinct possibility in some housing markets that never happened before. If mortgage rates are in the double digits then their carrying costs should also be, too.

What person homeowners and their lending institutions do in reaction to that will be interesting. Those that own outright will sell quick like the corpos. Those that are debtslaved will mail in the keys and squat like we saw in 2009-12 before.

RWSGFY says

Are you saying that every current owner will be completely fooked?

The ones that own the homes outright, no. Loan holders with just a few years to go, no. Loan holders that are seriously underwater can toss the keys to the bank. In reality though, if we had 28% rates that means serious inflation so the houses would have appreciated well above the original loan value.

DOGEWontAmountToShit says

Eric Holder says

What would happen to the housing market and the economy at large if the mortgage rates were 28%?

Houses that were bought for $500k will be for sale for $100k or even less.

AFTER those $500k houses stay frozen from the markets for as long as possible. Unless the corporate house holders dump entire neighborhood blocks that they own to get the hell out pronto. <-- this is a distinct possibility in some housing markets that never happened before. If mortgage rates are in the double digits then their carrying costs should also be, too.

What person homeowners and their lending institutions do in reaction to that will be interesting. Those that own outright will sell quick like the corpos. Those that are debtslaved will mail in the keys and squat like we saw in 2009-12 before.

You are not counting the replacement cost for housing into your equation. It acts as a floor for existing housing pricing as long as the demand to purchase available for sale units is there. We would have to get to the situation that Japan is in for steep interest rate increases to kill the value of homes like you’re suggesting ($0.20 on the dollar).

Real assets don't go down in value during periods of rapid inflation.