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Originally Posted by Azure
Either way long term I think the repeated interest rate increases without allowing for the supply chain & other inflationary things to clear themselves out will turn out to be a short sighted policy decision. I get the POINT of interest rate increases, but I don't get the point of sprinting towards the highest rates in years in an economy where employment rates are holding and there is still a massive demand for housing.
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A gradual frog in the pot approach would be far less effective and probably cost us all more in the long run. The goal is to change behaviours and decisions (both individuals and businesses) - if you move slowly nobody will notice enough.
Quote:
Originally Posted by Johnny199r
If someone has a low interest rate on their current place and buying a new home means a much higher interest rates, isnt that person a lot less likely to move?
I think inventory will be very low for a while in the housing market. Sure, some may need to sell due to life events like - divorce, new job, job transfer, but I think many don't need to move houses and a much higher mortgage rate on a new place certainly disincentives a move.
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Probably a lot more porting of mortgages, though i don't think that's always possible.