Anybody have a good answer to this question my friend texted me?
“I still want to know why interest rates went so high, and housing prices also went so high.. they should have some sort of inverse relationship and I can’t figure out what the fuck is going on”
I’m not good at the macro stuff
There's a delay between rates going up and it impacting people's mortgage payments.
Here in Canada most people do 5-yead fixed mortgages. So the rate increase won't impact them for another few years.
In terms of high housing prices, that's just our fiat dollars losing value at an incredible rate.
The crash is coming.
Non-fixed rate mortgages are retarded. Does Canada not have 30-year fixed?
Agreed.
Although if they stay this high when I have to renew I might go variable.
Because they can't raise rates. And even if they do, I don't mind paying slightly less principal for a few years.
But I don't have to worry about it for a while yet. Who knows what's gonna happen in the next few years here.
Were spiraling.
That 5 year fixed mortgage is going to be so painful. I guess part of the problem is that in the US all refinanced at low interest rates and now will never move because they can’t afford to, but their current mortgage is super cheap.
Yea, the way I see it is primarily fiat problems.
https://youtu.be/Z1YHIMpYdxg?si=W32xlnb4zJVGhnAd
I believe this ^ is the correct take. The paper (cash, bonds) is what crashed and everything remains at record high price levels. Really the unit of measure (fiat) crashed. Everyone is expecting a crash that isn’t coming.
It’s a max pain situation too bc soooo many people are waiting for the big one. And it is likely isn’t coming.
💯 I’ve said to myself for a while now that house prices must come down but am starting to rethink that. The way he compared the current situation to 2008 as being quite different also resonates with me.
It’s counter intuitive but I’ve started to realize this myself in 2024. I have a friend who keeps saying “the stock market has to crash” (in the US). And a few months ago I had a realization that the stock market really might not crash. I started to take the counter argument to his assertion and the light went on.
Everyone is trying to escape dollars (and inflation) and so that constant stream of capital into the stock market and real estate will likely just keep grinding prices higher. There might be a crack up boom of epic proportions down the road but I have my doubts real estate would sell off even in that scenario.
We’re in uncharted territory.
