Does anybody else think the Fed is myopic and has been for the past 20+ years of too low interest rates?
When the housing crisis hit, the Fed had been lowering rates and propping up unqualified buyers for overpriced houses.
This time, buyers were more qualified, but the housing market had a nutty emotional component brought on by one of the two Black Swan events. (Covid) I never thought Covid would sell houses, but it sure did.
I don’t think housing prices are going to tank like they once did, but the market will slow. Supply and demand issues are going to be with us for a while. The frenzy is probably coming to an end across the country, but people are still buying houses.
As people see their overall net worth shrink with the market, many might decide to sit tight in their current house for a while. Others will jump right in with a now-or-never philosophy and decide to put some money into buying a house, a hard asset, to be seen every day and enjoyed.
But these draconian interest rate increases are putting me in mind of a neighbor who used to holler at his kids, “STOP IT OR I AM GOING TO GROUND YOU FOR A YEAR — OR EVEN LONGER!”
Boomer
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