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Discussion Starter · #1 ·
National average 30 year fixed mortgage printed at 6.47% plus .4 points. That rate has roughly doubled in the last year. Housing prices have started to drift a little lower, but they have nowhere near reflected the massive increase in rates. It will take a while, but unless rates swiftly retreat I can't see how hosuing prices don't decline 20% or more from here, possibly a lot more.
 

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"Correction" I have thought that an interesting term to use with things like stock market, housing markets, green agenda, or where ever the term could be applied.....

It seems more a "harvest" of money in these things, mostly it seems from small investors, seemingly done by those with the power of one sort or another to manipulate these markets to there advantage...

My 5 cents of opinion being the curmudgeon I am...
 

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Discussion Starter · #6 ·
LOL

NonBoomers weren't around when little Jimmy Carter had interest rates for home buyers at 18%
Nobody buying in the last 25 years has any notion of that and most people aren't students of economic history. It isn't hard to figure out the implications of these rate increases on housing prices. The follow on effects (HELOCs cut, frozen RE market, problems for lenders, huge reduction in housing related consumption, etc.) will be harder to cuff, but some of it is obvious.
 

· Storyteller
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I bought my first house in 1980, the Carter years.
My rate for a 20 year fixed was 14.3%.
President House Plant has a ways to go yet in his trashing of the American economy.
Just give him some time

Little Jimmy had 4 years, the SCROTUS has barely started.
Wait until the 'carbon tax' nonsense really gets going.
 

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What would be a problem with a 20% reduction in RE prices, or even more higher reduction? Folks now are complaining about high prop taxes, affordability, inflation, lower prices would help reduce the financial burden on many folks. I’m a home owner and a real estate investor and I don’t see a problem with prices going down, I’ll just buy more homes if that happens. Seems like a win win to me. Sure, some speculators will lose their pants, that’s also seem like a win win to me.
 

· Pisticus Veritas
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Maybe that will stop the liberal Yankees from moving down here to Florida.
We’re full up.
Nothing seems to be stopping them from flooding southern Utah. There was nearly a traffic jam on I-15 between St. George and Cedar City last Saturday.

But everything the current regime touches turns to crap so I'm not surprised to see housing affected in a negative way. Comes with the territory and the ideology.
 

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Discussion Starter · #13 ·
I’m concerned by the effects on new home construction. My wife works full time for a company directly tied to new homes, and I work for them part time. I see signals that the boom around here might be winding down.
Will be hard times for the industry.
 

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The problem with devaluation is twofold;

1. Those who have bought within the last 5 years, would find themselves with a mortgage owing more than they could sell for.

2. The municipality increases its tax base by reassessing property values, while campaigning "taxes didn't go up."

Values drop 20% and tax revenue drops 20%.
Tax rate MUST be increased to maintain and as values recover, the rate remains.

Lose-Lose
Far from a Win-Win

I bought in 1979, integrates and valuations were just starting up. A month later, and we couldn't afford to buy what we had. We paid $42k.
I watched a house, 3 doors down, sell for $48k, that next month. In 2 years it sold for $65k and year and half $83k. They walked out, 6 months later. It sat empty for year and half. Finally, sold it for $35k.
I couldn't sell for what owed. What to do?
Remodel and add on.
Economy turned and equity grew, was 1992 before valuation was back to $42.
Listed it For Sale Apr 2003, time to get out. Sold in Aug $77k.
Talked with old neighbor, our house sold in May, $226k. Value drops 20%, they will be SOL. Hope they didn't get stuck with variable interest rate.
 

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The Fed is trying to kill the economy by raising interest rates and stifling demand. Problem is, we have supply side inflation, not demand side inflation. And the supply side inflation is all due to the Covid "stimulus" and money printing which followed.

Just watch... When the economy goes into a depression, the politicians will be pushing more stimulus to "help" the economy. It's insanity. The government has messed up everything.
 

· the "d" from ban[d]
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The Fed is trying to kill the economy by raising interest rates and stifling demand. Problem is, we have supply side inflation, not demand side inflation. And the supply side inflation is all due to the Covid "stimulus" and money printing which followed.

Just watch... When the economy goes into a depression, the politicians will be pushing more stimulus to "help" the economy. It's insanity. The government has messed up everything.
The Fed's charter is to control inflation and unemployment by using interest rates.

We do have demand inflation caused by money given out by the government when nothing was being produced. Staying home with nothing to do creating nothing with unearned money resulted in demand inflation. Without that supplies would not have been consumed so fast. We foolishly created a dependency on foreign made goods. Now we have no way to increase what we do not make. Why did we use our strategic reserves to lower energy prices over the summer? Now it is close to empty with winter coming and if we produced more energy we do not have safe efficient pipelines to get it to customers. So it will be exported. We used cheaper gas to go on vacations not back to work.

I am ready for a cold expensive winter but I don't think the country is.
 

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Yes :( Dh and I were planning to retire in 2024, but we need the equity in the house to do so. If values drop 20% or more, we won't be able to retire.
I'll be retiring about the same time. It's not the equity in my house that I worry about. It's the shrinking dollars in my retirement savings that keeps me up at night.
 

· Wildlife Proctologist
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Yes :( Dh and I were planning to retire in 2024, but we need the equity in the house to do so. If values drop 20% or more, we won't be able to retire.
Hate that for you, unfortunately a lot of people will be taken by surprise. At least you can see what’s coming and make decisions about downsizing early or otherwise plan accordingly.

I’m fortunate that my house is paid off and I never plan to move but I seriously doubt my retire early plan is going to happen because of inflation.
 

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Problem is, we have supply side inflation, not demand side inflation. And the supply side inflation is all due to the Covid "stimulus" and money printing which followed.
You are correct about inflation being supply side, but money printing and stimulus is demand side, not supply side. We still have broken supply chain.
 
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