If housing wasn’t overpriced, people with 6% mortgages could tack on 2% onto the mortgage principle and only shell out 4% on a timely basis to the mortgage company.
If inflation is 8% a year, do you think mortgages should be 4%? 5%? People lending out money would be losing 3% or 4% a year in buying power.
That is not my point.
The price on every hing is adjusted by the supply. And 8% times $300,000 is a little different than 8% times $150,000.
So the interest rate is not nearly so big a problem as the cost on which interest is being paid.