Market Watch

[2manyrocks]

Housing prices got to where they are when the 30 year rate was well below the actual rate of inflation because it was pretty much a no brainer to just pay whatever to buy any house before it got to be even more expensive due to both inflation and speculative demand. While I suppose this could go on exponentially forever in theory, the reality is housing affordability relative to income is the worst it has been in something like 30-40 years.

 

[drumminj]

Housing prices got to where they are when the 30 year rate was well below the actual rate of inflation because it was pretty much a no brainer to just pay whatever to buy any house before it got to be even more expensive due to both inflation and speculative demand. While I suppose this could go on exponentially forever in theory, the reality is housing affordability relative to income is the worst it has been in something like 30-40 years.

It likely won't go on forever, but you don't know when it will come back to a more historical balance. That leaves:

1) wait (perhaps indefinitely) for a more "rational" market
2) do your best to live your life within the constraints laid in front of you

We went with #2 and bought land in 2021 and built in 2022/2023. While I would have loved to pay more rational 2019 prices or have a mortgage rate from 2020/2021, I have zero regrets about choosing to move forward and start building the life I want to live for the next 40 years.

 

[Hay Dude]

Interest rates will tumble like a rock down a steep hill in 2024.
You can leave it up to your imagination to guess why.

 

[jyoutz]

Interest rates will tumble like a rock down a steep hill in 2024.
You can leave it up to your imagination to guess why.

The Fed Reserve announced a year ago that the target inflation rate is 2% and interest rates would be reduced as the target nears. We are currently at 3% inflation, so it’s to be expected that the Fed would start reducing interest rates.

 

[Hay Dude]

The Fed Reserve announced a year ago that the target inflation rate is 2% and interest rates would be reduced as the target nears. We are currently at 3% inflation, so it’s to be expected that the Fed would start reducing interest rates.

The Federal Reserve is a clown show.

 

[jyoutz]

The Federal Reserve is a clown show.

Whatever. If something doesn’t fit your political narrative, you reject it. But the Fed has stated their objectives awhile ago and they are sticking to the plan. And it seems to be working. To your disappointment.

 

[CloverKnollFarms]

To be fair, they choose what sectors make up inflation #s. Lets go back to the 1980 calculation... What is it then?

 

[Hay Dude]

Whatever. If something doesn’t fit your political narrative, you reject it. But the Fed has stated their objectives awhile ago and they are sticking to the plan. And it seems to be working. To your disappointment.

Trust me, I need lower interest rates more than you, but they‘ve been at record highs for 2+ years.
We need change

 

[jyoutz]

Trust me, I need lower interest rates more than you, but they‘ve been at record highs for 2+ years.
We need change

No where near record highs. The 1970-80s were many multiples higher interest.

 

[CloverKnollFarms]

No where near record highs. The 1970-80s were many multiples higher interest.

We actually calculated inflation differently back then... So it's not apples to apples