[jncfhnb]

If interest rates plummet and people start purchasing houses that they can only afford due to cheap loans, I would expect home prices to… rise. As they did before.

[game_the0ry]

> If interest rates plummet

Operative word being "If"...

What if rates go up?

Look at it from the perspective of the fed:

- Home prices up (or neutral)? Check...

- Stock market at all time highs? Check...

- Strong labor market + low unemployment? Check...

- High inflation? Check...

^^ The combination of the above make the case for rate increases, not cuts. [1]

[1] https://nypost.com/2024/02/20/business/larry-summers-said-th...

[jncfhnb]

Well if rates go up then we would not be in the dynamic reversing scenario you were asking about?

If the rates go up… then the dynamics you were discussing become more prevalent

[game_the0ry]

Could you elaborate please? Bc I do not follow what you are talking about.

[jncfhnb]

You said

> This is bc of interest rates going higher - nobody who has 3-4% fixed rate locked in will sell (until they have to).

And the asked

> Now imagine those 2 dynamics flipped the other way - what happens to prices then?

And I told you if interest rates went lower then priced would rise.

[game_the0ry]

> And I told you if interest rates went lower then priced would rise.

That's not what I meant.

I meant - what if:

- the 20-30% investor demand in the housing market would go away (demand down), and

- sales inventory went back to historical mean (supply up)

^^ then house prices go down bc demand goes down and supply goes up.

[jncfhnb]

The 20-30% of demand you’re citing is your own claim that it’s driven by all cash buyers. I’m not seeing any reason why they would possibly disappear. That class of homebuyers may comprise a smaller portion of demand, but only due to demand growth from mortgage wanters, which again implies lower interest rates.

You’re also conflating demand with quantity demanded, so this chain of reasoning is not correct.