When Fed lowers rates... house prices increase?

[mvbird]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

[tophcfa]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

The fed should not be lowering rates with the inflation we are experiencing. I don’t care what inflation numbers are being officially reported, inflation is real and badly needs to come under control. Also, the Fed needs to act as an independent agency and not bow to outside influences, lowering rates now would be a very bad look.

[Pugchief]

The fed should not be lowering rates with the inflation we are experiencing. I don’t care what inflation numbers are being officially reported, inflation is real and badly needs to come under control. Also, the Fed needs to act as an independent agency and not bow to outside influences, lowering rates now would be a very bad look.

The Fed should be abolished and let the free market set rates on short term securities like it currently does on longer term ones. Government manipulation of the free market rarely works as intended.

[Aces4]

The fed should not be lowering rates with the inflation we are experiencing. I don’t care what inflation numbers are being officially reported, inflation is real and badly needs to come under control. Also, the Fed needs to act as an independent agency and not bow to outside influences, lowering rates now would be a very bad look.

If rates are lowered again to nothing so the economy can keep functioning, we'll all know what deep doodoo in which we are living. An overvalued stock market so prices need to rise to fund the dividends and there will be unaffordable housing if a rate decrease goes through. The sad part is no one realizes free loan money (under 5%) is not normal and will eventually strangle us because there is no room for adjustment when the next severe recession rears it's ugly head. Inflation will go crazy and I agree, housing will be out of the reach of the younger generation because of the inflated prices. It's not pretty out there, enjoy the moment.. it's all we have.

[Aces4]

The Fed should be abolished and let the free market set rates on short term securities like it currently does on longer term ones. Government manipulation of the free market rarely works as intended.

This is true, abolish the Fed and interest rates will rise accordingly to where they should be. The overvalued stock market will return to normal and prices decrease since the products won't have to be overpriced to make up for the over valuation.

[vintageogauge]

Small businesses will benefit greatly with a reduction as their cost of inventory and equipment as well as administration costs has skyrocketed along with an increase in employee wages in order to attract competent employees.. Strong small business is the backbone of our economy. In addition to lower rates helping, the new investments in the US promised by large corporations both domestic and foreign over the last 6 months will keep us going strong well into the future. Most everyone I know that owns or manages a business is excited with what is happening out there.

[CoachKandSportsguy]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.


Cerebus paribus "all else being equal" yes

however, by how much will they rise will be the question. .
confounding influences to your hypothesis
1) the reduction will add more buyers to the current market, yes BUT will the number of buyers increase beyond the available supply to create a demand push price increase? currently highly unlikely.
2) many home owners with 3% mortgages are unwilling to sell or move for a small reduction in interest rates. . many of the current homes for sale increase is coming from distressed buyers, investors not getting the needed return or cash flow to support their ownership.
3) retirees may sell to downsize with cash, but will the interest rate reduction allow more buyers into that price range, highly appreciated housing?

4) currently the labor market is perfectly in balance, and if the rates are lowered for deteriorating labor market reasons, there will be fewer buyers and the prices will still need to go down for housing sales growth significant increase.

5) given the decline in the US Dollar, given the failure of the last two treasury auctions with a 50 % sold rate, 3 year and 10 year, given that the mortgage rates are not set by the federal reserve overnight lending rate, but are set by the free market, with a large influence by the treasury bond rates, the federal reserve funding rate might not impact long term rates as much as needed for significantly higher rates.

So the answer is not as simple as the fed lowering their overnight lending rate. . and in most cases, very small movements in the FFR has minimal impact on lending rates, as compared to other influences.

and don't forget about any potential minsky moments with the huge increase in the federal debt limit for spending increases. .

[jimhoward]

I think the downward pressure on home prices is so severe that it will take more than slightly lower interest rates to make them stabilize or rise. I think it will take sustained inflation for a couple of years.

[Aces4]

I think the downward pressure on home prices is so severe that it will take more than slightly lower interest rates to make them stabilize or rise. I think it will take sustained inflation for a couple of years.

There should be severe downward pressure on home prices, they are ridiculous right now and people jumped in like crazy during the "free money" rates period.

[Topspinmo]

IMO Government spending always causes inflation. Until government stops spending more than takes in prices will continue to go up. Course prices always go up anyway but, with government out of control it’s 3 fold or more. IMO need go back to gold standard, IMO that would limit government spending (they couldn’t just print paper money by train loads and give it away like Halloween candy.).

[BillyGrown]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

I doubt it. The market is flooded with 9 months of inventory. Some out and much on the shelf

[vintageogauge]

I think the downward pressure on home prices is so severe that it will take more than slightly lower interest rates to make them stabilize or rise. I think it will take sustained inflation for a couple of years.

Agree and as long as TV continues to build an abundance of new homes priced lower than re-sales they will sit for months if not lowered to compete with the new homes.

[Papa_lecki]

In the Villages, the first thing that will happen will be the inventory will see relief.
Couples who want to move to The Villages will be able to sell their primary home more quickly.

I don’t think a 0.25 reduction will do it. 0.50 or 0.75 will do it - then families will refi in 12 months when the Fed rate is around 2%

[Stu from NYC]

As an Economics professor once said lets get a dozen economists in a room to discuss this issue and we will get a minimum of 13 different opinions.

[Normal]

The Fed cut rates last fall and it resulted in lending rates actually going up slightly. It will take a lot more than a quarter or half point cut to turn the housing market around.

[mtdjed]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

We all have an expectation that we will continue to have an increasing standard of living. If that increase is due to increased skills and promotions, we move up the ladder. If that increase is cost of living it is inflation. More taxes, higher House prices is inflation and thus need for more cost of living increases. Fed rates lower allow for higher house/car/commodity prices and higher inflation. That means need for more cost of living increases.

The beat goes on. The people outside of the Cost of Living increase adjustments continue to fall behind. They then look to higher home prices when they sell, which keeps the cycle going.

You can't beat it, but you can ride the wave smartly.

[spinner1001]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

Doesn’t realize the Fed has no control over mortgage lending rates.

Mortgage interest rates are set by market participants (i.e., the market).

[joeinil]

Or as Truman once said….”give me a one handed economist “

[SaucyJim]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

Rates matter, sure. But the inventory here is through the roof. Until we work through that inventory (which is still trending upward), house values must fall. Painful medicine.

[BillyGrown]

Rates matter, sure. But the inventory here is through the roof. Until we work through that inventory (which is still trending upward), house values must fall. Painful medicine.

It should level out in about 2 years. We will continue to decline for a while with the pandemic correction and jobs will settle with the economic changes in place. Then we should see a moderate climb. Nothing like the lightning fast drop back in 08 though.

[oneclickplus]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?

Inflation is much higher than the government will ever admit. The fed should be raising rates. Yes, lower rates means housing prices (not values) go up. Higher rates produce the opposite effect. Why?

Because housing prices don't reflect actual value. We are not on a gold standard (or any standard). Same with cars and many large purchases. We are a debt-driven society. It's no longer "how much can you afford", rather it's "how much can you borrow". It's perverse. It's been that way since gold backing was removed. The constitution reads that all money must be gold or silver. The framers were very wise. But, we ignored them and put a private bank (Federal reserve) in charge so that we could borrow and spend more than we have (and not have to relinquish gold to foreign countries). It's just paper that much of the world has accepted as valuable since WW2. But the USD is slowly being removed as the world's reserve currency. Don't be deceived. When housing prices rise, all that means that the dollars you have are worth less and less. The higher prices go, the closer we come to the day when the dollar will buy NOTHING. It will continue to be this way until the collapse of the dollar. This is a mathematical certainty. If anyone thinks it's ok to continue borrowing and spending, those are the folks that skipped math class.

[chuckpedrey]

The Fed should have NEVER been created. Let The Villages banks determine what rate they will charge to do business and let Chase decide what rate they will charge to do business with you and let Wells Fargo decide what rate they will charge to do business with you.

[RoboVil]

The fed should not be lowering rates with the inflation we are experiencing. I don’t care what inflation numbers are being officially reported, inflation is real and badly needs to come under control. Also, the Fed needs to act as an independent agency and not bow to outside influences, lowering rates now would be a very bad look.
The Fed needs to reduce interest rates so young people can afford to buy a house. Inflation is not that high, and Powell has said he wanted to wait until he sees the effects of tariffs. Now with the weakening labor market it is time to start lowering rates. Not because of pressure, but because it is common sense.

[Ptmcbriz]

Compounding the inflation are the tariffs. I recently bought a E-bike from Germany. When the time came for DHL to deliver it, I got an email from our lovely government (and confirmation from DHL) that I had to pay a $1800 import fee (aka tariff) before they could release it for delivery. The tariffs are skyrocketing prices for citizens. This is crazy on top of our high expense of interest rates. If the whole idea is to get US citizens to stop buying things, these tariffs will definitely do it. Unfortunately, that means many businesses going out of business as a result.

[opinionist]

Cutting short-term interest rates will reduce payments on the national debt, but the long-term rates will only decrease if QE (money printing) is used to buy long-term debt. We would not have a national debt if non-interest-bearing treasury notes were used in place of debt notes. The bankers scammed us with the First Bank of the United States, the Second Bank of the United States, and the Federal Reserve. They are a parasite on the economy, having collected an inflation-adjusted $30 trillion in national debt interest payments.

Seniors are being forced into higher-risk assets with lower returns on money markets. Price inflation is a killer, driving people to seek higher returns. Purchasing rental homes has been a success for some people, but it is a business that has risks and requires considerable effort to remain profitable.

I purchased my home with cash, but I do care about interest rates because I worry about the fiscal health of the United States. There is no budgetary restraint at the Federal level, and all the "free money" will get shut off when the inevitable crash happens.

[Aces4]

Compounding the inflation are the tariffs. I recently bought a E-bike from Germany. When the time came for DHL to deliver it, I got an email from our lovely government (and confirmation from DHL) that I had to pay a $1800 import fee (aka tariff) before they could release it for delivery. The tariffs are skyrocketing prices for citizens. This is crazy on top of our high expense of interest rates. If the whole idea is to get US citizens to stop buying things, these tariffs will definitely do it. Unfortunately, that means many businesses going out of business as a result.

Don't you mean many businesses in Germany will be going out of business? It really pays to shop American.

[kingofbeer]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase. If buyer's monthly financing costs are lower they qualify to buy at a higher price.

Another part of my argument is that money market rates will continue to sink, causing some to want to invest in real estate instead, hoping or renting, for a better return.

The other side of this argument is Villages house prices will remain the same because many buy Villages homes with cash, no financing, and they won't care.

Discussion ?
Lower interest rates will encourage first time home buyers to buy. And will encourage investors to move their money from money market and cd's into the stock market. Real estate investors is not the focus of lower interest rates.

[kingofbeer]

The Fed should be abolished and let the free market set rates on short term securities like it currently does on longer term ones. Government manipulation of the free market rarely works as intended.
The Fed works. When inflation is sky high, lowering interest rates has proven to be the best way to lower inflation. This is economics 101.

[kingofbeer]

IMO Government spending always causes inflation. Until government stops spending more than takes in prices will continue to go up. Course prices always go up anyway but, with government out of control it’s 3 fold or more. IMO need go back to gold standard, IMO that would limit government spending (they couldn’t just print paper money by train loads and give it away like Halloween candy.).
Gold standard ? Let's all have a beer and laugh about that.

[joshgun]

Trump will replace Powell next year with someone who will drastically cut interest rates. Prices(inflation) will soar we will soar. We will be in a recession by 2027.

[justjim]

I don’t think even the so called “experts” know what the results of A.I. are really going to bring. We are entering into a “new phase” that will bring changes that “old folks” like us can’t imagine. Jobs will be lost and new jobs created similar to the move from an agricultural society to an industrial society.

OP, lowering interest rates may
allow some to buy in TV who are attempting to sell their current house. House prices will naturally rise with increased inflation. All of this doesn’t happen by clicking a switch or pushing a button. This is why Congress set up the Federal Reserve to be independent and manage inflation, monetary oversight and promote maximum employment. A.I. and tariffs certainly complicates the situation. All well above most of us pay grade. Fore.

[jimjamuser]

Small businesses will benefit greatly with a reduction as their cost of inventory and equipment as well as administration costs has skyrocketed along with an increase in employee wages in order to attract competent employees.. Strong small business is the backbone of our economy. In addition to lower rates helping, the new investments in the US promised by large corporations both domestic and foreign over the last 6 months will keep us going strong well into the future. Most everyone I know that owns or manages a business is excited with what is happening out there.
Small farmers are going bankrupt and even committing suicide today.

[rsmurano]

I guess economics wasn’t taken in college. There are many many factors that go into people buying a house, interest rates impact this greatly!
A few stats: 65% of the country lives paycheck to paycheck (working or receiving social security checks), 32% of home buyers pay cash, and the median net worth of a 65 year old is $400,000.
So to get a home loan, the DTI ratio has to be around 36%. So how much can a couple spend on a house if they have $50-$60,000 income (assumption is $40k from social security/pension and 4% withdrawal rate on $400,000-$500,000 portfolio).
Lower mortgage rates will help greatly in this scenario.
The bigger picture for a possible homeowner, most people in the country have car loans and I’m guessing they don’t have a 800 credit rating so they could be paying up to 10% for a car. How about credit card rates? In no interest days CC rates are in the 20% bracket, now I think they are much higher. Then these same people get loans to take a big vacation, loans to fix their cars, medical bills, buy toys, on and on.
Lower interest rates would greatly help the majority of the people. Lower interest rates will help lower their DTI ratio so they can qualify to buy a house. The lower the rate is, some cash buyers will get a loan instead and instead of taking the money out of the market to buy a home, they can earn much much more money in the market. I just did this buying a new car, the dealer gave me a couple grand off the price of the car if I would finance it instead of paying cash for it. So instead of taking $50k out of the market making tons of money, I took the loan and over the 3 years of financing, the total interest paid will be $300.

Lower interest rates will help the majority of businesses (small, medium, large) by keeping costs lower so they will be able to pay bigger dividends or make their businesses grow to make their stock price go up.

As for the stock market, why would people think it’s frothy/too high? Far from it. Look at gains since the 1st week of April? Huge gains! How about the huge gains his past week? Huge!!! 1 of my stocks went up 45% in 1 day, others went up over $10-$13 a share in 1 day, and look at Apple that was beaten down, I think they went up $25 this past week.
None of these gains had anything to do with interest rates nor were they based on PE ratios. I think the 1 stock that went up 45% has a PE in the hundreds. Some of these companies had their quarterly earnings reported and they beat on the top and bottom with very good future guidance or a couple of these companies landed huge contracts so the future looks good. I don’t look at the total market. I look at individual stocks, what’s their future look like, have they been beaten down lately so they might be a good value, on and on.
IMO, the day Powell or his replacement lowers rates (he should be fired and the rates should have been lowered months ago), the stock market will go up huge, and over the following couple of months, the home market will explode.

[Aces4]

Small farmers are going bankrupt and even committing suicide today.

Baloney, where are the stats showing small farmers are going broke and committing suicide?

[Aces4]

Lower interest rates will encourage first time home buyers to buy. And will encourage investors to move their money from money market and cd's into the stock market. Real estate investors is not the focus of lower interest rates.

There are many that will move their money into real estate and not the stock market. A tangible is much better than the illusion of safety and wealth.

[Aces4]

I guess economics wasn’t taken in college. There are many many factors that go into people buying a house, interest rates impact this greatly!
A few stats: 65% of the country lives paycheck to paycheck (working or receiving social security checks), 32% of home buyers pay cash, and the median net worth of a 65 year old is $400,000.
So to get a home loan, the DTI ratio has to be around 36%. So how much can a couple spend on a house if they have $50-$60,000 income (assumption is $40k from social security/pension and 4% withdrawal rate on $400,000-$500,000 portfolio).
Lower mortgage rates will help greatly in this scenario.
The bigger picture for a possible homeowner, most people in the country have car loans and I’m guessing they don’t have a 800 credit rating so they could be paying up to 10% for a car. How about credit card rates? In no interest days CC rates are in the 20% bracket, now I think they are much higher. Then these same people get loans to take a big vacation, loans to fix their cars, medical bills, buy toys, on and on.
Lower interest rates would greatly help the majority of the people. Lower interest rates will help lower their DTI ratio so they can qualify to buy a house. The lower the rate is, some cash buyers will get a loan instead and instead of taking the money out of the market to buy a home, they can earn much much more money in the market. I just did this buying a new car, the dealer gave me a couple grand off the price of the car if I would finance it instead of paying cash for it. So instead of taking $50k out of the market making tons of money, I took the loan and over the 3 years of financing, the total interest paid will be $300.

Lower interest rates will help the majority of businesses (small, medium, large) by keeping costs lower so they will be able to pay bigger dividends or make their businesses grow to make their stock price go up.

As for the stock market, why would people think it’s frothy/too high? Far from it. Look at gains since the 1st week of April? Huge gains! How about the huge gains his past week? Huge!!! 1 of my stocks went up 45% in 1 day, others went up over $10-$13 a share in 1 day, and look at Apple that was beaten down, I think they went up $25 this past week.
None of these gains had anything to do with interest rates nor were they based on PE ratios. I think the 1 stock that went up 45% has a PE in the hundreds. Some of these companies had their quarterly earnings reported and they beat on the top and bottom with very good future guidance or a couple of these companies landed huge contracts so the future looks good. I don’t look at the total market. I look at individual stocks, what’s their future look like, have they been beaten down lately so they might be a good value, on and on.
IMO, the day Powell or his replacement lowers rates (he should be fired and the rates should have been lowered months ago), the stock market will go up huge, and over the following couple of months, the home market will explode.

The flatuous stock market gains are called inflation, to pay those "dividends" they need to sock it to the peoples. I'm not impressed and as far as your free money proposition, how about taking that money from the earners in the market vs the savers in the institutions to pad the everyone must spend attitude.

[Pugchief]

Small farmers are going bankrupt and even committing suicide today.

Baloney, where are the stats showing small farmers are going broke and committing suicide?

All I ever see on the news these days is stories about small farmers committing suicide! [/sarcasm]

[Pugchief]

This is why Congress set up the Federal Reserve to be independent Fore!

May have been set up that way, but no longer the case. Five!

[Pugchief]

The Fed works. When inflation is sky high, lowering interest rates has proven to be the best way to lower inflation. This is economics 101.

No Econ 101 is leave the market alone and it will work itself out naturally.

Unintended consequences are the hallmark of virtually everything the government tries to "fix".

[Pugchief]

IMO Government spending always causes inflation. Until government stops spending more than takes in prices will continue to go up.

Correct.

need go back to gold standard, IMO that would limit government spending

Also correct. Which is why it will never happen.

[jimjamuser]

A.I. and robotics are the BIG changes on the horizon. People have problems dealing with rapid CHANGE. Major corporation CEOs are now scratching their heads and putting off any expansion because they are having trouble seeing into the future. And they have many multiples of experts. Even the FED seems a little confused.

[vintageogauge]

Baloney, where are the stats showing small farmers are going broke and committing suicide?

He's referring to the farmer that met the love of his life online only to be taken for a financial ride and then dumped. He ended up broke, lonely, and then did the deed.

[Aces4]

He's referring to the farmer that met the love of his life online only to be taken for a financial ride and then dumped. He ended up broke, lonely, and then did the deed.

:agree: :1rotfl:

[jimjamuser]

We all have an expectation that we will continue to have an increasing standard of living. If that increase is due to increased skills and promotions, we move up the ladder. If that increase is cost of living it is inflation. More taxes, higher House prices is inflation and thus need for more cost of living increases. Fed rates lower allow for higher house/car/commodity prices and higher inflation. That means need for more cost of living increases.

The beat goes on. The people outside of the Cost of Living increase adjustments continue to fall behind. They then look to higher home prices when they sell, which keeps the cycle going.

You can't beat it, but you can ride the wave smartly.
The problem is that we have not seen an INCREASE in the standard of living since about 1970. Most people today feel they are not as well off as their parents - and their children will be LESS well off than they are. Outsourcing to AVOID labor unions began this problem about 1970. Many people believe that unions are a PROBLEM. They have been mesmerized into believing this, but it is NOT true.

[jimjamuser]

The Fed needs to reduce interest rates so young people can afford to buy a house. Inflation is not that high, and Powell has said he wanted to wait until he sees the effects of tariffs. Now with the weakening labor market it is time to start lowering rates. Not because of pressure, but because it is common sense.
Shoes and other clothing prices are ALREADY up and rising. Parents facing higher back-to-school prices will be VERY UNHAPPY campers!

[Aces4]

The problem is that we have not seen an INCREASE in the standard of living since about 1970. Most people today feel they are not as well off as their parents - and their children will be LESS well off than they are. Outsourcing to AVOID labor unions began this problem about 1970. Many people believe that unions are a PROBLEM. They have been mesmerized into believing this, but it is NOT true.

That's a bunch of bahooey. Look at all the garbage, uh.. make that "stuff", people have now compared to those of us living in 1970. The cell phones, computers, sleek cars and big trucks, tvs and their service providers, expensive tennis shoes, tattoos, concerts, stylized t-shirts, college educations, manicures, pedicures, hair processes, piercings, dining out and so much more. If you can show me those who live now like we did in 1970, then we're comparing apples to apples.

[Pugchief]

He's referring to the farmer that met the love of his life online only to be taken for a financial ride and then dumped. He ended up broke, lonely, and then did the deed.

Well then, we can certainly infer from this isolated anecdote that farmerS everywhere are offing themselves.

[jimjamuser]

Compounding the inflation are the tariffs. I recently bought a E-bike from Germany. When the time came for DHL to deliver it, I got an email from our lovely government (and confirmation from DHL) that I had to pay a $1800 import fee (aka tariff) before they could release it for delivery. The tariffs are skyrocketing prices for citizens. This is crazy on top of our high expense of interest rates. If the whole idea is to get US citizens to stop buying things, these tariffs will definitely do it. Unfortunately, that means many businesses going out of business as a result.
I agree. Small farmers are already going out of business.......and killing themselves!

[Aces4]

Shoes and other clothing prices are ALREADY up and rising. Parents facing higher back-to-school prices will be VERY UNHAPPY campers!

Why? We now have charity services for everyone. Get in line and get your free bookbag filled with supplies. And come fall, there will be a clothing drive for thousands of new or barely used jackets, gloves and hats. It's a joke at this point and we have many who won't do for themselves. That is what should make you unhappy, capable people learning not to work. Do some need those services? Absolutely, but my guess would be 80% of them do not.

[Aces4]

I agree. Small farmers are already going out of business.......and killing themselves!

In which country? I know more small farmers than you'll ever know and they're not going anywhere, life is good.

[jimjamuser]

Baloney, where are the stats showing small farmers are going broke and committing suicide?
I knew that I would be asked that. I erased the story after I read it - sorry. I believe that it was written by the Head of a Small Farmers Group. I just read it today, so it should be easy to find. Try Googling small farmers.

[jimjamuser]

All I ever see on the news these days is stories about small farmers committing suicide! [/sarcasm]
Please look it up. What possible motivation would I have to lie about it?

[jimjamuser]

That's a bunch of bahooey. Look at all the garbage, uh.. make that "stuff", people have now compared to those of us living in 1970. The cell phones, computers, sleek cars and big trucks, tvs and their service providers, expensive tennis shoes, tattoos, concerts, stylized t-shirts, college educations, manicures, pedicures, hair processes, piercings, dining out and so much more. If you can show me those who live now like we did in 1970, then we're comparing apples to apples.
People are people. Each generation wants to show its '"COLORS" and be different than the past generation. Certainly there is change (and happening quicker) - long hair, short hair, beards, short dresses, and long dresses. Styles come and go. Changes and invention are happening EVER more and more quickly. Hard to keep up.

[BillyGrown]

Trump will replace Powell next year with someone who will drastically cut interest rates. Prices(inflation) will soar we will soar. We will be in a recession by 2027.

You can replace the Fed chairman, but he or she still has only one vote on the board of 12 members. The chairman or woman merely announces the vote by the Fed to either raise , maintain or lower rates. No chairman has ever gone around the wishes and votes of the Fed. They are mostly the spokesperson for the group.

Where some get their misinformation about the Fed is beyond me.

[Aces4]

People are people. Each generation wants to show its '"COLORS" and be different than the past generation. Certainly there is change (and happening quicker) - long hair, short hair, beards, short dresses, and long dresses. Styles come and go. Changes and invention are happening EVER more and more quickly. Hard to keep up.

We're talking about how they are spending their money vs how we had to spend ours, finances not fashion..

[Aces4]

I knew that I would be asked that. I erased the story after I read it - sorry. I believe that it was written by the Head of a Small Farmers Group. I just read it today, so it should be easy to find. Try Googling small farmers.

It has always been an issue. Heck, when you work hard day after day to help feed America with unpredictable circumstances such as weather, commodity prices, etc. expenses and you see some fat cat sitting in front of his computer making a killing in the market, it can be depressing. That said, it's always been an issue due to many factors. I remember years ago a wonderful, very kind, decent farmer who committed suicide in his 40's and his farm was thriving. There is an isolation and lack of social services to farmers that doesn't help with the problem. I do know the problem can't be assigned to this day in time alone.

[Retiredsteve]

The Fed should be abolished and let the free market set rates on short term securities like it currently does on longer term ones. Government manipulation of the free market rarely works as intended. Yet here we are 250 years later

[Bwanajim]

The fed should not be lowering rates with the inflation we are experiencing. I don’t care what inflation numbers are being officially reported, inflation is real and badly needs to come under control. Also, the Fed needs to act as an independent agency and not bow to outside influences, lowering rates now would be a very bad look.

There should be an independent agency, but noticed they lowered interest rates three times last year when the inflation was worse.
This year , they refused to lower them at all.
If they lower them even a quarter percent housing sales will skyrocket and the economy will be better off. That's simple economics 101.

[Bwanajim]

My girlfriend bought her house here in February 2022 and paid 3% interest rate. I bought my house eight months later and my interest rate would've been 8%.!!! go ahead and tell me there's not a problem.🤷🏼*♂️🤷🏼*♂️
We did not have that kind of a crazy inflation in eight months.
So tell me why? I believe most of us know.
Fortunately I was able to pay cash for my house.

[Pugchief]

I knew that I would be asked that. I erased the story after I read it - sorry. I believe that it was written by the Head of a Small Farmers Group. I just read it today, so it should be easy to find. Try Googling small farmers.

Please look it up. What possible motivation would I have to lie about it?

You're the one who made the wild assertion, so it's on you to provide a link supporting the statement. Not our responsibility. There is a history feature in your browser if that helps.

[Pugchief]

Yet here we are 250 years later

Yes, here we are. After multiple near financial disasters that manipulation of the markets caused. I always enjoy privatizing profits while publicizing the risks.

[Pugchief]

My girlfriend bought her house here in February 2022 and paid 3% interest rate. I bought my house eight months later and my interest rate would've been 8%.!!! go ahead and tell me there's not a problem.🤷🏼*♂️🤷🏼*♂️
We did not have that kind of a crazy inflation in eight months.
So tell me why? I believe most of us know.
Fortunately I was able to pay cash for my house.

Not sure we do. Why don't you tell us your theory?

[Aces4]

My girlfriend bought her house here in February 2022 and paid 3% interest rate. I bought my house eight months later and my interest rate would've been 8%.!!! go ahead and tell me there's not a problem.🤷🏼*♂️🤷🏼*♂️
We did not have that kind of a crazy inflation in eight months.
So tell me why? I believe most of us know.
Fortunately I was able to pay cash for my house.

Yep, there is a problem. Your girlfriend should be paying more interest and free money should be removed from the loan system. Interest rates on borrowing should NEVER drop below 5%, at the very least, and right there you would stop the crazy inflation. But in order to prop up the economy, the new venue has been to come and see how low the borrowing interest rates can be lowered. Let's face it, the debt is HUGE and we are all going to have to sacrifice and pay for it and unfortunately, our children and their children will see the worst of it.

[Normal]

If the Federal Reserve finally lowers (and continues to lower) interest rates in September, I think house prices may increase.


Discussion ?

Meaning you know currently they are decreasing right? Newsweek, Redfin and several sources all indicate a 11% decrease over the past year here in the Villages. IMHO price increases will come sooner but likely later (Mid 26). I think the increase will correlate with the economy and be a gradual thing over an extended time period. Few economists were factoring in Tariffs and other impediments that have now developed.

[Ptmcbriz]

Don't you mean many businesses in Germany will be going out of business? It really pays to shop American.

America manufactures very little anymore. Too often it’s impossible to compete with cheap labor elsewhere and we don’t have the facilities which take many years to build. No one here manufactures these specialized bikes for disabilities and customizes to the length of your legs and arms. This German company supplies many of these bikes to the VA for those with missing limbs.

We are a global economy now. If the US sneezes everyone else catches a cold.

[Ptmcbriz]

Why? We now have charity services for everyone. Get in line and get your free bookbag filled with supplies. And come fall, there will be a clothing drive for thousands of new or barely used jackets, gloves and hats. It's a joke at this point and we have many who won't do for themselves. That is what should make you unhappy, capable people learning not to work. Do some need those services? Absolutely, but my guess would be 80% of them do not.

If you ever lived under the stress of poverty you wouldn’t jump to these inaccurate assumptions. No one WANTS to live with scarcity. Charities don’t come close to helping everyone in need. Way too many children are hungry at school which distracts them from learning.

[kingofbeer]

No Econ 101 is leave the market alone and it will work itself out naturally.

Unintended consequences are the hallmark of virtually everything the government tries to "fix".
That is the fed's mandate and that is how they operate.

[kingofbeer]

Why? We now have charity services for everyone. Get in line and get your free bookbag filled with supplies. And come fall, there will be a clothing drive for thousands of new or barely used jackets, gloves and hats. It's a joke at this point and we have many who won't do for themselves. That is what should make you unhappy, capable people learning not to work. Do some need those services? Absolutely, but my guess would be 80% of them do not.
This has nothing to do with interest rates. I have no problem donating things I don't need or don't use to charity.

[kingofbeer]

There should be an independent agency, but noticed they lowered interest rates three times last year when the inflation was worse.
This year , they refused to lower them at all.
If they lower them even a quarter percent housing sales will skyrocket and the economy will be better off. That's simple economics 101.
I doubt the housing sales will skyrocket. Tariffs are causing consumers and home buyers to worry.

[Stu from NYC]

Baloney, where are the stats showing small farmers are going broke and committing suicide?

Is it possible they are unhappy with the EV they purchased?

Sarcasm Sheldon

[Stu from NYC]

My girlfriend bought her house here in February 2022 and paid 3% interest rate. I bought my house eight months later and my interest rate would've been 8%.!!! go ahead and tell me there's not a problem.🤷🏼*♂️🤷🏼*♂️
We did not have that kind of a crazy inflation in eight months.
So tell me why? I believe most of us know.
Fortunately I was able to pay cash for my house.

3% interest on a mortgage is an historically low rate. In 1990 our last mortgage paid about 8% and thought it was a good price.

Interest rates go up and they go down.

[Aces4]

If you ever lived under the stress of poverty you wouldn’t jump to these inaccurate assumptions. No one WANTS to live with scarcity. Charities don’t come close to helping everyone in need. Way too many children are hungry at school which distracts them from learning.

We didn't grow up with silver spoons in our mouths. My generation grew up with scarcity, hand me downs, smaller home meals with no junk snacks, two pair of shoes a year. One pair was for school and the other pair for church on weekends and they weren't fancy. I first flew in an airplane when I was 24 and it was many years before I flew again. I didn't see Disney as a kid...This list could go on and on and there is far too much excessive spending in America for junk we don't need. Why are people having children they cannot afford? I said earlier that, of course, there are always extenuating circumstances and people are more than willing to help the truly needy who have had a life changing event.
That's not the case now, lines form for the freebies and we keep enabling dependence rather than independence in this country. We could use a world with fewer material things and better brain training for the practical way to live.

[Aces4]

Is it possible they are unhappy with the EV they purchased?

Sarcasm Sheldon

Funny! They wouldn't waste their money on an EV at this point in time. Give 'em a good ole diesel engine.

[Aces4]

[QUOTE=kingofbeer;2452549]I doubt the housing sales will skyrocket. Tariffs are causing consumers and home buyers to worry.[/

Worry about what?

[Aces4]

America manufactures very little anymore. Too often it’s impossible to compete with cheap labor elsewhere and we don’t have the facilities which take many years to build. No one here manufactures these specialized bikes for disabilities and customizes to the length of your legs and arms. This German company supplies many of these bikes to the VA for those with missing limbs.

We are a global economy now. If the US sneezes everyone else catches a cold.

Sneezes or belches? You've been fed a line...
Per AI:
Yes, several US-based manufacturers and companies offer handicap-adjusted electric bicycles, often referred to as adaptive bikes or electric trikes.
Here are some examples of US-based manufacturers and retailers focused on providing adaptive cycling solutions:
Worksman Cycles: This US-based manufacturer builds a wide range of cycles, including adaptive trikes and bikes for individuals with disabilities. They emphasize affordability and customization options to suit individual needs.
Adaptive BIKETOWN: This company offers various adaptive cycling options, including electrically assisted trikes and tandem bikes designed for comfort and stability.
eSpecial Needs: This retailer carries the DUET Wheelchair Bicycle Tandem, which has been in North America for over 20 years. It accommodates a wide range of ages and sizes and can be disconnected for independent use of the wheelchair.
Sixthreezero: This company offers step-through electric bikes that are designed to be accessible for individuals with mobility issues. They emphasize comfort, ease of mounting and dismounting, and adjustable features.
Emerys Cycling Triathlon & Fitness: This company offers assessments and modifies bicycles to fit individual needs, including solutions for those with strokes, cerebral palsy, spina bifida, and more.
In addition to these US-based options, other manufacturers are highlighted for their focus on adaptive features in e-bikes, like HOVSCO. Key features that make electric bikes suitable for individuals with disabilities often include:
Step-through frames: Easier to mount and dismount, especially for those with limited mobility.
Tricycle designs: Offer enhanced stability, which is beneficial for balance impairments.
Customizable support: Adjustable seating, handlebars, and other components to fit individual needs.
Electric assist: Reduces the effort required for pedaling, making cycling accessible for individuals with limited strength or endurance.
Accessible controls: Features like low-reach brake levers or hand controls.
If you are looking for an adaptive electric bicycle, it's recommended to consult with an e-bike retailer to discuss your specific needs and find the best option for you.

[kingofbeer]

[QUOTE=kingofbeer;2452549]I doubt the housing sales will skyrocket. Tariffs are causing consumers and home buyers to worry.[/

Worry about what?
Rising prices. Maybe they might lose their job. Economics 101 again.

[Aces4]

[QUOTE=Aces4;2452632]
Rising prices. Maybe they might lose their job. Economics 101 again.

I'd worry more about losing my job because of this country's terrible debt than tariff's. That's called "can't see the forest for the trees" syndrome.

[Pugchief]

Is it possible they are unhappy with the EV they purchased?

Sarcasm Sheldon

:a20:
I see what you did there....

[Normal]

The Fed Will Not be cutting interest rates anytime soon.

So-called core prices, which exclude volatile measurements of gasoline and food to better assess price growth trends, were up 0.3% from the prior month and 3.1% from a year ago. The annual core figure was hotter than economists' expectations of 3%, while the monthly figure was in line with the estimate.

[Caymus]

Home prices have increased much more than incomes of the years. CNBC reported that the average age of first time buyers was in the 20's in 1980 and is now 38. They will need very low rates to afford a home.

[Aces4]

Home prices have increased much more than incomes of the years. CNBC reported that the average age of first time buyers was in the 20's in 1980 and is now 38. They will need very low rates to afford a home.

They will need lower priced homes not very low interest rates and thanks to severe inflation which will recur will low interest rates, it ain't gonna happen.

[kkingston57]

As an Economics professor once said lets get a dozen economists in a room to discuss this issue and we will get a minimum of 13 different opinions.

Best answer. We now have 3 pages of opinions and a lot of them coming from people who like getting 4-5% on bullet proof investments like CDs

[kkingston57]

The Fed cut rates last fall and it resulted in lending rates actually going up slightly. It will take a lot more than a quarter or half point cut to turn the housing market around.

1/2 of the problem is the rates. Homes are still out of reach for some home buyers. Watched an old All in the Family show and Archie could live in a small home and was making $5.50 an hour

[kkingston57]

Don't you mean many businesses in Germany will be going out of business? It really pays to shop American.

Problem is that there are probably NO American companies which make bikes. Just bought an American made bike rack. Well built but paid $500 more than something from China

[Aces4]

Best answer. We now have 3 pages of opinions and a lot of them coming from people who like getting 4-5% on bullet proof investments like CDs

And a lot of the opinions are coming from players in the stock market hunched over their computers who hope prices for everything keep rising for their own profits. I would suspect this time around, if interest rates drop to the basement, more money will be applied to real estate purchases than CD's. There is only so much land and let the borrowers find cheap money somewhere else. The lesson learned wil be it doesn't pay to save.

[Aces4]

Problem is that there are probably NO American companies which make bikes. Just bought an American made bike rack. Well built but paid $500 more than something from China

Oh for heavens sake, per AI:
Several well-known American companies manufacture bicycles. Some of the most prominent include Trek, Specialized, Cannondale, and Schwinn. Additionally, brands like SE Bikes, Mongoose, and Santa Cruz are also popular choices. For custom or smaller-scale production, companies like Allied Cycle Works, Reeb Cycles, and Waterford Precision Cycles are known for their American-made bicycles. You may have paid more for your bike rack but I'll bet it lasts longer than a Chinese rack.

[kkingston57]

There should be an independent agency, but noticed they lowered interest rates three times last year when the inflation was worse.
This year , they refused to lower them at all.
If they lower them even a quarter percent housing sales will skyrocket and the economy will be better off. That's simple economics 101.

Economy might soar. In a soaring economy inflation goes up and people who are hurt most are seniors and/or others living on fixed incomes. FED is an independent agency

[Whatnext]

My girlfriend bought her house here in February 2022 and paid 3% interest rate. I bought my house eight months later and my interest rate would've been 8%.!!! go ahead and tell me there's not a problem.🤷🏼*♂️🤷🏼*♂️
We did not have that kind of a crazy inflation in eight months.
So tell me why? I believe most of us know.
Fortunately I was able to pay cash for my house.

The world was just emerging from Covid restrictions, and inflation became a world wide problem.
The US was one of the first to recover from the downturn

[Normal]

1/2 of the problem is the rates. Homes are still out of reach for some home buyers. Watched an old All in the Family show and Archie could live in a small home and was making $5.50 an hour

Tariffs will dictate no rate hikes or rate cuts. Currently the Consumer Price Index CPI is leading the Producer Price Index PPI. If inflation is maintained at 3% the Fed board will never vote to cut rates. They know full well producers will raise their pricing until
they see a progressive inventory balance.

Homes still aren’t priced low enough to traditional trending prior to COVID. In many cases home prices are up by over 100% from just prior to 2019! That all has to come back down. Many economists see the rebalancing in trend to be about 30 points off of a 2019 selling price. This certainly means further reductions in current home prices. Recall, if a home value went up 2-3% per year since 2019, this would still measure far less than a 30% increase in home values from the 2019 demarcation.

[jimhoward]

1/2 of the problem is the rates. Homes are still out of reach for some home buyers. Watched an old All in the Family show and Archie could live in a small home and was making $5.50 an hour

Homes have always been out of reach for some buyers. The home ownership rate in the US, while down from its peak a few years ago, is slightly higher now than it was in the 1970s. But, the variation is small. It has hovered around 65% for the past 50 years.

[Stu from NYC]

Homes have always been out of reach for some buyers. The home ownership rate in the US, while down from its peak a few years ago, is slightly higher now than it was in the 1970s. But, the variation is small. It has hovered around 65% for the past 50 years.

Problem is politicians think everyone should be able to live in a house. As a result credit becomes easier to get and people are able to buy what they cannot afford.

If people want to have more they can always work harder and get a second job. That is how my parents bought there first home.

In the long run let the market determine housing prices.