this post was submitted on 28 Sep 2023
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They keep blaming it on rising interest rates...
But the truth is the decline in buying is because there's nothing to buy. A person eventually sells their house for any number of reasons. A corporation using rental as long term investments never will, and the biggest don't care about interest rates because they're making cash purchases anyways.
I'm not saying high mortgage rates aren't a problem, I'm saying they only are for people buying housing to live in, and those people can't afford to buy regardless of interest
Interest rates are a big part of it because people who have a mortgage who would consider moving otherwise won't. I'd consider moving, but there's no way I'd trade my sub 3% fixed for nearly 8%.
My house is about 600k. At today's rates I'd pay nearly 1.4 million over the life of the loan. 4k per month. At my current rate I'm paying about half that. For the same house.
This is the reason no one is selling. Everyone who had a mortgage when the rates hit record lows is never going to sell. Why would they. I'd literally be better of keeping this house and renting it out if I wanted to move. Nobody with 2.9% loans is better off walking away from it, it's free money. Inflation is shrinking the value of what I owe, this mortgage is better than cash, and I get a house.
Not to be rude, but are you saying you have no equity and you want to sell your house?
Because when you sell your house, what's not paid off goes to the bank, and you keep everything you paid off which in this case would go to the new house offsetting your future mortgage.
People flipping houses and moving before building equity was only a thing for a brief window
From 1960 till 2022 the historical inflation rate has been 3.8% per year. If they have a loan for 2.9%, they are inflating away their debt, so the longer it takes to pay, the “cheaper” it gets while they are still getting all the appreciation.