Since the vast majority of homeowners aren’t doing so with cash, the total cost of a home is the price over the lifetime of the mortgage. I’d be fine with the higher interest rates if the base price of the home was lower, or vice versa. However, the houses have gone up in price AND the interest rates have gone up meaning that the total cost has risen substantially.
Some of this is due to scarcity caused by the 2008-9 recession, people couldn’t afford homes, so the amount of new construction dropped and the workforce adjusted. Meaning that now we’re behind a few million homes from what we should have built by now, and that scarcity is driving prices up. Combine that with the high interest rates causing people to want to hold on to what they have instead of moving (so they can avoid the interest rate and housing cost jump) means we have even less inventory that normally.
I’ll probably have to move for work soon, and I’m not looking forward to swapping my mostly paid off 4% home with a more expensive higher rate one in a different area.
I’m old. These rates don’t seem high at all. It’s been higher for most of my life.
Congratulations on being old e ough to buy property when it was cheap.
For the rest of us, we all adapted to the low interest post-08 world. Now, we need to adapt to the higher interest post-21 world.
Since the vast majority of homeowners aren’t doing so with cash, the total cost of a home is the price over the lifetime of the mortgage. I’d be fine with the higher interest rates if the base price of the home was lower, or vice versa. However, the houses have gone up in price AND the interest rates have gone up meaning that the total cost has risen substantially.
Some of this is due to scarcity caused by the 2008-9 recession, people couldn’t afford homes, so the amount of new construction dropped and the workforce adjusted. Meaning that now we’re behind a few million homes from what we should have built by now, and that scarcity is driving prices up. Combine that with the high interest rates causing people to want to hold on to what they have instead of moving (so they can avoid the interest rate and housing cost jump) means we have even less inventory that normally.
I’ll probably have to move for work soon, and I’m not looking forward to swapping my mostly paid off 4% home with a more expensive higher rate one in a different area.
Oh, home ownership has been out of reach for me and everyone I know my age in my part of the country since before I graduated from University.