Comments on: Households Priced Out by Higher Interest Rates https://eyeonhousing.org/2022/03/households-priced-out-by-higher-interest-rates-2/ National Association of Home Builders Discusses Economics and Housing Policy Tue, 05 Apr 2022 19:49:50 +0000 hourly 1 By: Karen Margrave https://eyeonhousing.org/2022/03/households-priced-out-by-higher-interest-rates-2/#comment-1923993 Tue, 05 Apr 2022 19:49:50 +0000 https://eyeonhousing.org/?p=31485#comment-1923993 The dynamics of the housing market is completely different than we’ve ever seen. With Covid changing the demographics and pushing people out of larger cities into smaller ones, people able to work from home, together with rising inflation, higher gas prices, supply chain constraints, etc. and now rising interest rates, it’s wreaking havoc!
Materials costs for new construction, lack of labor and available land on which to build are pushing new construction costs out of making any sense at all. With fewer new homes being built it puts more pressure on the existing inventory. Property owners seeing rising prices are choosing to remain in their homes as downsizing or upsizing would cost too much. Unless there’s something done to control regulations that push the costs of new construction downward again and make it easier to develop housing, we won’t see affordability. The people on the lower rung of the ladder will keep falling off.

]]> By: Colin Robertson https://eyeonhousing.org/2022/03/households-priced-out-by-higher-interest-rates-2/#comment-1911078 Mon, 07 Mar 2022 15:46:42 +0000 https://eyeonhousing.org/?p=31485#comment-1911078 With more prospective buyers priced out as interest rates rise, one could argue that competition would decline and asking prices might cool to some degree.

Simply put, fewer qualified buyers competing for a given property might lead to a lower sales price.

And if you believe home prices go down when rates rise (which isn’t proven), there’s additional relief there as well.

]]> By: Eduard https://eyeonhousing.org/2022/03/households-priced-out-by-higher-interest-rates-2/#comment-1911050 Mon, 07 Mar 2022 14:57:16 +0000 https://eyeonhousing.org/?p=31485#comment-1911050 When interest rates go up, many households can no longer buy median-priced new homes.

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