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The housing market is about to take a hit as student loan payments restart

markets.businessinsider.com

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Re: The housing market is about to take a hit as student loan payments restart

#61

Post by ffgjgf1 »

jowdones wrote: post #28
ffgjgf1 wrote: post #20

Earlier quoted context omitted.

Just like 7% inflation isn’t that bad because it could be a whole lot worse?

Look, a 10% interest rate isn't that much on a $10,000 personal loan. But that doesn't even buy you a new car today and for a measly apartment in a major city you gotta be prepared to spit in the vicinity of $1,000,000. This insanity has to stop, hence the high interest rates.

Not sure high interest will result in any meaningful decrease in real estates prices. Best case they might stay stagnant for a few years which would allow wages to catching up a bit.

Re: The housing market is about to take a hit as student loan payments restart

#62

Post by thunky »

TheSpiceIsLife wrote: post #57
thunky wrote: post #55

Earlier quoted context omitted.

Don't buy the $1,000,000 house if you think it's too expensive. It's only (over)priced that way because rates were low and prices haven't adjusted to current rates yet.

I don't think those are the only reasons house prices are high now. Why don't you try telling the whole truth.

You're right I shouldn't have said "only", but in my opinion it's the main reason. And of course there are several reasons rates move.

When rates were around 3% not so long ago, the monthly payment on a $1M loan was around $4k. Now at current rates the monthly payment is closer to $7k. As a buyer, that's pretty hard to shrug off. It ends up eliminating entire classes of buyers just like it added them when rates were going down.

Re: The housing market is about to take a hit as student loan payments restart

#63

Post by ethanbond »

TheSpiceIsLife wrote: post #56
Turing_Machine wrote: post #53

Earlier quoted context omitted.

Mortgage interest rates have been far, far higher than 7% in the past. In 1981, the average mortgage rate hit 16.63%. The rates were higher than 7% all through the '70s, '80s, and most of the '90s, not dropping below 7% until 1998.

I know, I was there. My first job back then paid $4.75 an hour, and I bought my first home for $37,500. So go on, keep fucking telling me things were harder back then.

Nobody is saying things were harder they’re saying interest rates aren’t the problem. Note the principal on your first home.

Re: The housing market is about to take a hit as student loan payments restart

#65

Post by throw9away6 »

tmn wrote: post #19
throw9away6 wrote: post #3

People paying off student loans probably can’t afford houses anyway different demographics.

There are many doctors, lawyers, therapists, etc who are juggling mortgages or wanting to buy a house, and loan payments. Your point isn’t mute though

There are probably a few doctors that get hit pretty hard by that. Most collage grads even with 100k incomes can’t buy a house because any place that pays new hires 100k likely has house prices starting in the 600-1m range

Re: The housing market is about to take a hit as student loan payments restart

#66

Post by throw9away6 »

thsksbd wrote: post #7
paulpauper wrote: post #5

Earlier quoted context omitted.

but what about the college wage premium?

When normalized for talent, the premium is quickly diminishing and is closed for many fields of study.

I always took it to be a quality of life premium with better hours and work conditions but wages are quickly leveling off

Re: The housing market is about to take a hit as student loan payments restart

#67

Post by armatav »

ethanbond wrote: post #63
TheSpiceIsLife wrote: post #56

Earlier quoted context omitted.

I know, I was there. My first job back then paid $4.75 an hour, and I bought my first home for $37,500. So go on, keep fucking telling me things were harder back then.

Nobody is saying things were harder they’re saying interest rates aren’t the problem. Note the principal on your first home.

It’s definitely the interest rates in combination with incessant printing into inflation.

How do you think the principal got higher, magic?

Re: The housing market is about to take a hit as student loan payments restart

#68

Post by sidewndr46 »

fortran77 wrote: post #51
sidewndr46 wrote: post #15

Earlier quoted context omitted.

90% of mortgages may be locked in under 3%, but no one who has payed off their home is going to sell that and wind up financing another house with interest rates where they are at.

True, but people who paid off their homes can often move and buy their next home for cash, especially if they're downsizing.

that only works if you can sell your home for what you paid for it. Demand contracts when interest rates rise.

Re: The housing market is about to take a hit as student loan payments restart

#69

Post by ethanbond »

armatav wrote: post #67
ethanbond wrote: post #63

Earlier quoted context omitted.

Nobody is saying things were harder they’re saying interest rates aren’t the problem. Note the principal on your first home.

It’s definitely the interest rates in combination with incessant printing into inflation. How do you think the principal got higher, magic?

By not building homes at anywhere close to the rate of population growth. It's so obvious by looking at the data you'd be gobsmacked anyone is talking about anything else before simply building more houses. Eliminate most zoning, bring in labor from outside the country, train up domestic labor, create incentives for construction and construction tech, so on and so forth.

There simply aren't houses.

Inflation doesn't help, but housing prices have risen way faster than the rate of inflation. So again: find the actual problem and solve it.

Re: The housing market is about to take a hit as student loan payments restart

#70

Post by tmn »

vba616 wrote: post #25
tmn wrote: post #19

Earlier quoted context omitted.

There are many doctors, lawyers, therapists, etc who are juggling mortgages or wanting to buy a house, and loan payments. Your point isn’t mute though

Or moot.

Haha yes, thanks for pointing that out
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