If you can buy a house much cheaper than when the rate was under 6 percent, is that not a wash? You can always refinance if the rate drops.
I think this is good. Keeps people who cannot really afford a house away. We don’t need anymore of those folks.
It could be. I don’t know that for sure. It is possible that the lower price at 15% for a 30 year fixed could result in the same monthly payment as the higher price on a 6% 30 year fixed. My concern is, that it will take a lot longer for prices to fall drawing out the length of the crisis and it will make a lot more people upside-down, causing more foreclosures, causing less people to make payments to banks, and so increasing the scale of the crisis.
This is not about right or wrong so much as Bazooka Hank and Chopper Ben are trying to “fix” the crisis. If 30 year mortgage rates soar, their “fix” is going to be much weaker than it would be.
FWIW, I think Bazooka and Chopper are pushing on a string and the crisis needs to unwind itself in it’s own time and scale of deleveraging.
The point of my post was that Chopper and Bazooka are pushing on a string if they are trying to put a floor under housing that is pulled away with higher mortgage rates.
FWIW, I am all cash. I would live to be able to buy a home for $10,000 cash and get shares of Goldman sachs for $0.10. That said, if we get there, I won’t be needed my cash balances before I’ll be needing my stockpile of lead supplies.