Basically he thinks they may go sideways for now. The house price futures market (which I didn’t know existed) predicts a 10% fall in prices from now till 2024 or 2025.
If home prices can stay flat or sideways with the current mortgage interest rates, I can only imagine what will happen when rates are lowered again. Housing prices are gonna go up by 30% (instantly, or as quickly as the fed moves) if the fed decides it’s safe to lower rates to below 4% again. Housing scarcity in desirable locations (places with jobs, airports, music venues, etc. ) is never going away.
Housing scarcity in desirable locations (places with jobs, airports, music venues, etc. ) is never going away.
“Never” is a long time. Demographics drive housing costs more than interest rates. Millennials are having kids right now, so they are going to want to move out of expensive cities to larger acreage soon. Gen Z has even less money than millennials. Plus, boomers are retiring and will soon be selling their places downtown that they bought for a song in 82.
So we have:
Boomers - leaving cities for retirement communities
Millennials - leaving cities for smaller towns with more room
Gen Z - stuck 10 to a room, unable to purchase anything
Who’s going to be buying expensive places in cities?
Here’s Robert Shiller, who developed the current index for housing prices.
https://fortune.com/2023/07/24/housing-market-robert-shiller-home-price-prediction-outlook/amp/
Basically he thinks they may go sideways for now. The house price futures market (which I didn’t know existed) predicts a 10% fall in prices from now till 2024 or 2025.
If home prices can stay flat or sideways with the current mortgage interest rates, I can only imagine what will happen when rates are lowered again. Housing prices are gonna go up by 30% (instantly, or as quickly as the fed moves) if the fed decides it’s safe to lower rates to below 4% again. Housing scarcity in desirable locations (places with jobs, airports, music venues, etc. ) is never going away.
I suspect they’ll lower them very slowly knowing this.
A lot of inflation was simply record rises in housing costs.
“Never” is a long time. Demographics drive housing costs more than interest rates. Millennials are having kids right now, so they are going to want to move out of expensive cities to larger acreage soon. Gen Z has even less money than millennials. Plus, boomers are retiring and will soon be selling their places downtown that they bought for a song in 82.
So we have:
Who’s going to be buying expensive places in cities?