Mortgage Rate Going Up

Are you changing your view that there would be a 15-20% price decline?

Up up and away :slight_smile:

I still think there will be a decline in prices this year, which will be driven by the buyers essentially being unable to pay the prices of Q4 2021, because:

  1. their stock portfolios are not doing as well (I.e., lower down payments)
  2. they cannot afford as big a loan because of increase in mortgage rates

So, I think prices will decline because demand cools off, not because supply increases. Supply, esp of prime RBA SFH, will remain very low since sellers are further disincentivized to list their properties, thanks to having locked in incredibly low rate mortgages.


I’m getting 4.25% now after refing at 3.75% like a month ago.


Your point is the article doesn’t reflect reality?

The implied meaning of many articles is mortgage rates go up lead to lower prices and lower mortgage rates lead to higher prices. This is too simplistic. It ignores the cost of new construction and hence replacement cost of a house. The former shifts the demand curve while the latter shifts the supply curve. Economic major, please correct me where necessary.

Gas averaged $5.00 19 days ago on LA county. Today, it’s $6.00.

Another velocity pattern to watch:

Mortgage rates have been in the upper 3’s, low 4’s. Now …

Thanks for reading!

Wow, I thought we wouldn’t see 5% u til next year. This will kill used home inventory. People with 3% mortgages aren’t going to sell to buy a home with a 5% rate.



Means :rocket: prices :money_mouth_face: since prices of new construction are :rocket: because of inflation and supply constraints.

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Will demand follow fall in supply because less buyers might be able to afford the higher payments?

There will always be buyers, since people will keep getting married and having babies. They might have to settle for a less expensive house though.


Zillow does predict prices going up till @March 2023, with the caveats on increasing inflation and Fed interest rates which might upset it’s forecast.

Remember more money is lost waiting for correction than holding through correction. Prices are climbing at an annualized rate of 30-40%. A SFH rental I bot in Dec last year is already up 10%+ according to both Zillow and Redfin. After prices peak and correct, I believe is still higher than my purchase price.