Chart: Mortgage Rate vs. Existing Home Sales

[Matt Collins]

SOURCE:

​​​​​​​https://www.visualcapitalist.com/us-mortgage-rate-vs-existing-home-sales-chart/

 

[Brian4Liberty]

Real estate and construction are industries that can stop on a dime. It happens all the time. People will stay in their current house. Major construction projects can sit fallow for a decade or longer.

 

[GlennwaldSnowdenAssanged]

I am not a financial historian but I think that interest rates for homes have been artificially low for many years. I don't think that 3% interest is the historical average interest rate for home mortgages. I think people complained years ago that interest rates were too low and that was robbing people of their savings. People with savings could not earn enough interest to combat inflation. How can interest rates be cheaper than inflation?

 

[oyarde]

I am not a financial historian but I think that interest rates for homes have been artificially low for many years. I don't think that 3% interest is the historical average interest rate for home mortgages. I think people complained years ago that interest rates were too low and that was robbing people of their savings. People with savings could not earn enough interest to combat inflation. How can interest rates be cheaper than inflation?

Ya for decades interest rates would be around 4 , GDP would go up a little more than 1 1/2 and inflation would be around 2 or 3 and the bank would pay you 0.01 while debt , deficit spending on stupid shit and money supply grew enormous. Sooner or later you get to where we have arrived now. Once you get here it doesnt get better. According to Collins chart 5 percent is the magic killer number which is nothing . Probably the real problem is while they spent 23 years pumping up the debt from 5 trillion to 33 trillion and printing FRN's the median income barely moved and median new homes cost 4 times as much. Median income yr 2000 was 32 K new median home was 167K . Currently median income 36k , new median home 430k. Hard to get back from damage like that. We know the jobs numbers being reported this yr are false and I think the inflation numbers in the past were also. This is third world now

 

[CaptUSA]

I am not a financial historian but I think that interest rates for homes have been artificially low for many years. I don't think that 3% interest is the historical average interest rate for home mortgages. I think people complained years ago that interest rates were too low and that was robbing people of their savings. People with savings could not earn enough interest to combat inflation. How can interest rates be cheaper than inflation?

This is true.

But people don't really make decisions based on historical data. More often, they make decisions based on relative data. If interest rates for home purchases were at 15%, then they dropped to 7%, you'd see a huge uptake in the purchasing of homes. But, if the interest rates were at 3-4%, then increased to 7% you'd see what we have now - a halt to purchasing.

Kinda like when it's 60 degrees in the winter and people start wearing shorts, but when it's 60 degrees in the summer, people start wearing jackets.

 

[Madison320]

House prices don't seem to be falling yet. I've been looking to move for over a year now and there's no supply of smaller homes. I live in eastern tn and prices have been rising 15% a year the last few years. My guess is the McMansions are dropping in price while the 1000-1500 sq ft homes are skyrocketing. I'm assuming there's a glut of big homes from 20 years of ultra low rates. Nobody was building smaller houses.

 

[oyarde]

House prices don't seem to be falling yet. I've been looking to move for over a year now and there's no supply of smaller homes. I live in eastern tn and prices have been rising 15% a year the last few years. My guess is the McMansions are dropping in price while the 1000-1500 sq ft homes are skyrocketing. I'm assuming there's a glut of big homes from 20 years of ultra low rates. Nobody was building smaller houses.

The 70k to 85k starter homes here three yrs ago start at 160K and up now , been that way over a yr. at least Nothing but 300K and up being built. In fact just the lot , basement , septic and driveway are more than a starter home 3 yrs ago , that is without beginning to build the home.

 

[Invisible Man]

7 percent isn't even that high historically speaking. We've just gotten used to really low rates for the past 20 years.