<story><title>Mortgage rates have been rising at a pace not seen in almost 50 years</title><url>https://www.lmtonline.com/business/article/Mortgage-rates-have-been-rising-at-a-pace-not-12940865.php</url></story><parent_chain><item><author>ChuckMcM</author><text>I&amp;#x27;ll take that argument :-). If we enter a deflationary spiral in housing it traps people with mortgages who find themselves owing more in their house than it is worth (we saw that after the Mortgage meltdown). Where as if the prices continue to rise, we see people who would prefer to own houses kept out of the market, but their mobility is not impacted.&lt;p&gt;Of the two scenarios, I consider the deflationary one &amp;quot;worse&amp;quot; in terms of its impact on more people.</text></item><item><author>dcosson</author><text>It&amp;#x27;ll arguably end even worse if they keep going up though.</text></item><item><author>Bucephalus355</author><text>FYI, housing prices can rise as well as &lt;i&gt;fall&lt;/i&gt; for periods of 40-50 years and this has been shown in the historical record.&lt;p&gt;The Journal of Real Estate Economics has a fascinating article from 2011 which goes into this in detail, by looking at the price of land &amp;#x2F; various housing structures in Manhattan and Chicago from 1920 to 1960.&lt;p&gt;By 1932, housing prices had dropped nearly 70% from their 1929 peak. If you had bought a 1-story house in Manhattan in 1929, it would not be until the mid-1960’s that you got to just break-even, let alone made any money.&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.people.hbs.edu&amp;#x2F;tnicholas&amp;#x2F;anna_tom.pdf&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.people.hbs.edu&amp;#x2F;tnicholas&amp;#x2F;anna_tom.pdf&lt;/a&gt;&lt;p&gt;Also for those curious, I suggest you search “home prices” on &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;images.google.com&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;images.google.com&lt;/a&gt;. The very first image is so laughable, and such a suggestion of the times we are in. This will not end well.</text></item></parent_chain><comment><author>dcosson</author><text>I can&amp;#x27;t follow this logic at all. When home prices go up, rents also go up. How is your mobility not affected when you can&amp;#x27;t afford rent and have to move out of the city? Or for the people whose rent goes above what they can afford and they end up homeless?&lt;p&gt;If you&amp;#x27;re underwater on a mortgage, it&amp;#x27;s still the same payment month over month that you were expecting when you took out the mortgage. It&amp;#x27;ll recover eventually if you hold on. When you&amp;#x27;re paying rent month to month, that number changes on you as prices rise and you can&amp;#x27;t just hold on.</text></comment>
<story><title>Mortgage rates have been rising at a pace not seen in almost 50 years</title><url>https://www.lmtonline.com/business/article/Mortgage-rates-have-been-rising-at-a-pace-not-12940865.php</url></story><parent_chain><item><author>ChuckMcM</author><text>I&amp;#x27;ll take that argument :-). If we enter a deflationary spiral in housing it traps people with mortgages who find themselves owing more in their house than it is worth (we saw that after the Mortgage meltdown). Where as if the prices continue to rise, we see people who would prefer to own houses kept out of the market, but their mobility is not impacted.&lt;p&gt;Of the two scenarios, I consider the deflationary one &amp;quot;worse&amp;quot; in terms of its impact on more people.</text></item><item><author>dcosson</author><text>It&amp;#x27;ll arguably end even worse if they keep going up though.</text></item><item><author>Bucephalus355</author><text>FYI, housing prices can rise as well as &lt;i&gt;fall&lt;/i&gt; for periods of 40-50 years and this has been shown in the historical record.&lt;p&gt;The Journal of Real Estate Economics has a fascinating article from 2011 which goes into this in detail, by looking at the price of land &amp;#x2F; various housing structures in Manhattan and Chicago from 1920 to 1960.&lt;p&gt;By 1932, housing prices had dropped nearly 70% from their 1929 peak. If you had bought a 1-story house in Manhattan in 1929, it would not be until the mid-1960’s that you got to just break-even, let alone made any money.&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.people.hbs.edu&amp;#x2F;tnicholas&amp;#x2F;anna_tom.pdf&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.people.hbs.edu&amp;#x2F;tnicholas&amp;#x2F;anna_tom.pdf&lt;/a&gt;&lt;p&gt;Also for those curious, I suggest you search “home prices” on &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;images.google.com&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;images.google.com&lt;/a&gt;. The very first image is so laughable, and such a suggestion of the times we are in. This will not end well.</text></item></parent_chain><comment><author>beefield</author><text>This is why in my opinion local goverment should somehow credibly commit to keep land prices nominally constant by adjusting taxes on property. (Land, not buildings) Inflation would take care of long term lowering of the housing costs which is arguably a good thing to most people.</text></comment>