Quote:
Originally Posted by GGG
If proper due diligence was done with the stress tests than people should be okay for a 2-3% increase. They should have been qualified at 5.25% or their mortgage rate plus 2%
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I don't think rates alone will cause a huge issue, though they could very well have to go well above a 2-3% increase to get inflation under control. It's hard to see how a 3% Fed/BoC rate is going to combat 7-8% inflation if it gets entrenched.
The bigger issues will be job losses during a recession and people potentially being underwater when housing prices likely drop. That could lead to a pretty ugly combination.