Quote:
Originally Posted by raggedy-andy
So let me get this straight. Rates were in the 3's and 2's for a few years when we weren't in a recession, but we needed to jack them up to 'avoid' a recession? So they jacked them up to 7% because of excessive federal spending and inflation. And when inflation came back under control, they made a couple 25 and 50 basis point cuts then halted with a slightly different explanation each time about avoiding the cuts.
So why now with inflation at stable lows, a stalled housing market, and pricing for even starter homes being out of reach, the Fed continues to artificially maintain a higher rate.
Sure, that makes all the sense in the world. 
Look, we don't expect seeing 2% rates again, but 7% given the current patterns being artificially hiked doesn't make sense either. Something in the 5's would probably satisfy others and provide some needed stimulus to the RE markets. It's not about saving for a house or cheap money, but it is about affordability differences removing people from the market that isn't doing anyone any favors. |
The only time rates were fiddled with so badly was the recession and covid. 7% isn't an artificially hiked rate. Prices are not going down, more have gone up and people are spending every like crazy. Watch what happens if rates are artificially depressed again. It's no wonder people don't bother saving money anymore, it pays peanuts for interest and their dollars are worth a lot less if they spend them later rather than sooner.