Will interest rate hikes crash housing?

#interestrates #housingmarket #heisesays
Will rate hikes crash housing or will reduced supply and increasing demand offset any impact?


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  1. One thing I've not heard anyone talking about is that until recently, borrowers were assessed based on being able to handle a 2% rate increase. Well I bought just over a year ago and am already up 1.5%. We'll be ok because being self-employed the lenders wouldn't consider most of my earnings, but there will be plenty who are starting to hit those limits, especially if they push another 0.5% rise in August as expected.

    I don't see how this (when taken with the rampant inflation – home brand long life milk was $1 last year. Today it just hit $1.60) doesn't crash the housing market big time, but we thought the same thing about when Covid hit, or when the GFC hit. Did bugger all to the market.

    So who knows 🤷🏼‍♂️

  2. Interesting, the USA mortgage rate is fixed and lasts the length of the loan. Or as I understand it. Also, if you can not pay the loan, you can go to the bank give them the keys to the house and just walk away..If you do this, you lose everything, you walk away with nothing… Yes, I want 1990 back, 17% interest houses were starting at $100k..:)

  3. The thing is the word crash..

    No housing will not crash, it will go down for a period of time and then bounce back.

    Once interest rates stabilise it will give certainty then housing will rise.

  4. “What crazy bs could happen?” – challenge accepted!!

    – 55 year long mortgages
    – Use super as down payment on PPoR
    – Gov backed mortgages, just like student loans in US
    – Shared equity scheme
    – Send cash to stressed owners
    – Quantitative peopleing
    – Drop stamp duty
    – Subsidised rates for younger couples or LGBTQI+

  5. If anyone wants the housing to crash then basically they are sadists because our economy will go with it. So people that want this to happen will seldom afford to buy a house because they would of either lost their job or had their hours cut.

  6. People will do everything to hold on to their homes. Will stop the daily coffee before they worry about their mortgages. Until higher than 10% interest rates will just reduce new borrowers lending capacity so will slow the price growth but will also cause hospitality pressures before housing declines.

  7. Houses that enter the market will be picked up by the property arms of the investment banks. This is apparently happening in the US. Say hi to you new landlords.

  8. Stagflation is there and a deep recession is following suit, worldwide. Australia is not isolated – guess why interest rates go up in all the Dollar economies?

  9. With unemployment rate at a record low "allegedly" and the new Australian inflation rate to be released in 2 weeks, which I'm expecting to be more than 5.1% (I'd say at least 7%), I'd say the next rate rise would need to be at least 1% if they are serious about fighting inflation.. if Govenor Lowe wants to continually fall behind and misjudge things again than it will be .5% again.

  10. The AUD exchange rate with the USD is a big factor. It is all tied to the what the Fed does.. The US CPI is now over 9%. So more rate rises in the US. That means more rate rises here. Sure Airbus Anal and the state dictators will try and push it but I think they will fail. How much property falls is anyones guess though.

  11. You keep taking about the drop.
    if it was 20% (it has dropped this in areas of the hunter already)

    Plus inflation ,plus wage rises it is going to be in real world values 40%

    People in Australia need to study economics a home is a liability. If it is your home it is not a asset unless you sell it and most people want to stay in the same area.

    Anyway USA will put interest rates up if we don't go up at the same speed or faster our problems grow.

    China is collapsing.there GDP is going down to the lowest for ever.we where saved buy them last time . This time china is going to do a big wet one on all of us.

  12. The rental crush also impacting a basic 3br house in my street Tweed Shire $390 2020 long term tenant. New tenant July 2021 $650 per week 12 month lease tenant wanted to renew July 2022 but owner refused going to paint and lease for $780 per week because the agent just got that much for the one next door. Consiquence a family both working now living in a tent with 2 kids paying $1400 this fortnight because of school holidays so sad shelter no longer affordable.

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