Home sales
- Thread starter renter1
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This is only true if all other things stayed equal. Interest goes up when there is inflation. But, the Fed will ensure inflation always out pace interest, otherwise everyone will just stick their money under the mattress and it will magically be worth more later. That would cripple the economy.
The more inflation gets out of control the higher the interest rate. But, since inflation makes money worth less by definition property prices will go up, despite rising interest rate. Sure, there will be a transitional period where rising interest rate will lead to lower home prices. But, they are always a temporary phenomenon.
It's not a zero sum thing. Interest rates can go up to keep inflation in check. Also, 10-year treasuries are generally > inflation. Federal funds rate can be lower but that's not necessarily always the case. Under much of Greenspan's tenure we've had a fed rate > inflation.
hello said:
This is only true if all other things stayed equal. Interest goes up when there is inflation. But, the Fed will ensure inflation always out pace interest, otherwise everyone will just stick their money under the mattress and it will magically be worth more later. That would cripple the economy.
The more inflation gets out of control the higher the interest rate. But, since inflation makes money worth less by definition property prices will go up, despite rising interest rate. Sure, there will be a transitional period where rising interest rate will lead to lower home prices. But, they are always a temporary phenomenon.
eatthis said:
It's not a zero sum thing. Interest rates can go up to keep inflation in check. Also, 10-year treasuries are generally > inflation. Federal funds rate can be lower but that's not necessarily always the case. Under much of Greenspan's tenure we've had a fed rate > inflation.
Laguna21
New member
I think the question whether to buy now has very little to do with interest rates, inflation, and whether or not the home will appreciate it value as no one can ever predict these things.
Everyone was saying that the rates would go up a year ago, and aren't they still as low as ever now?
But if anything, purchasing a home at a lower price with a high interest rate is always more economical vs purchasing a home at a higher price with low interest rates. You can always refinance later on at a lower rate when they drop, whereas you are stuck with whatever price you paid for the home at the time.
Really in the end, as long as you are purchasing a home as a long-term investment, then you can't go wrong, and you can ride all the waves along the way.
Everyone was saying that the rates would go up a year ago, and aren't they still as low as ever now?
But if anything, purchasing a home at a lower price with a high interest rate is always more economical vs purchasing a home at a higher price with low interest rates. You can always refinance later on at a lower rate when they drop, whereas you are stuck with whatever price you paid for the home at the time.
Really in the end, as long as you are purchasing a home as a long-term investment, then you can't go wrong, and you can ride all the waves along the way.
Home sales are over heated and seeing a slump across the nation and is applicable to Socal/Orange county. The price should lower as the economy is slowing this year with barely 2% GDP. Interest rates are not expected to go up. So waiting for sometime for home price corrections may be prudent and good for the long run 
NewtoIrvine1
New member
Real estate is all local but i agree with Ochome10 if you look at
https://www.redfin.com/city/9361/CA/Irvine
for example you can see that the number of homes for sale is at the highest it's been this time for year and the number of home sold isn't keeping pace verses last year so you are seeing a build up in inventory hence 700+ listings
Also median sold price is only 695k vs list price of 850k so expensive homes in the million+ range just isn't moving and that leads the way for the rest of housing going foward. This is also in the middle of historically low interests rates again. Lets say the fed raises rates later this year as expected in September/December/Beyond and interest rates go up and blows up the last shred of afforability left...
https://www.redfin.com/city/9361/CA/Irvine
for example you can see that the number of homes for sale is at the highest it's been this time for year and the number of home sold isn't keeping pace verses last year so you are seeing a build up in inventory hence 700+ listings
Also median sold price is only 695k vs list price of 850k so expensive homes in the million+ range just isn't moving and that leads the way for the rest of housing going foward. This is also in the middle of historically low interests rates again. Lets say the fed raises rates later this year as expected in September/December/Beyond and interest rates go up and blows up the last shred of afforability left...