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The Fed and Home Prices
Old 12-19-2018, 02:22 PM   #1
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The Fed and Home Prices

This may belong in Fire and Money, but because the subject is so large, and involves the Federal Reserve, will try it here.

Without getting into detail, I recall a time in the very early 1990's when we found our dream house log cabin, on a mountain in Lake Placid NY. The price was right $31,000 and we had enough for a down payment, so we went to a local bank, to find out what we had to do, to buy. It was in the afternoon on a Thursday, and the interest rate was 10.7%... not too terrible at the time. On Friday we went to close the deal, and the rate had gone to 12.9%.

That's the framework I'm thinking of as I look at the current outlook for home sales. Of course not anything like today, but based on what effect the current dip in home sales is having on the economy, perhaps a harbinger for the longer term.

The subject is so huge,I wouldn't pretend to make comment, and the trends are so variable, that what happens in location "A" is far different from the market in "B".

I do believe that this will be a major market consideration in the coming years.

Subject for discussion? ... or maybe not as important as I think.
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Old 12-19-2018, 02:30 PM   #2
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When we bought a house in 1980 our interest rate was 12%. I think as the rates go up house prices will probably come down some.
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Old 12-19-2018, 03:03 PM   #3
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Apologies... I missed this similar thread, when I posted this.
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