Login
  • 2

Thanks

1

You’re welcome.

Sean, I saw one chart of US home prices. Why do you say that home prices are in a bubble?

I didn't say they were in a bubble (like stocks are). I said its a sign that real estate prices (broadly) could be peaking out. It's too early to tell for sure. But when mortgage applications fall due to interest rates rising curtailing their desire to buy...when buying pressure eases off of supply what do you get? Falling prices, at some point. And where are rates headed in the future? The Fed tells us that 3-4 rate hikes are coming. If so, that will curtail even more buying. Also, the charts you're seeing are backward looking, meaning...those charts reflect the past situation but not what's brewing now and what's likely going forward into the future. Remember, as rates go up, monthly payments go up and people can afford less and less. So it puts the next level of homes out of reach for many. By the way, in a rate-rising environment, you don't want to have a variable rate loan. You want a fixed rate loan so that you're not the victim to future rate increases on your own loan, etc.

Stories