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iShares 20+ Year Treasury Bond Message Board

  • rjr091305 rjr091305 May 28, 2011 9:31 AM Flag

    Low Rates aren't helping housing market - how would high rates?

    Low rates are here to stay. The economy is stalling.
    Higher rates will KILL the housing market.

    The stock market has only performed well due to the fact that money is being forced to flow there from those seeking returns.

    Yes, investors are being forced to take more risk...sound familiar. This will be worse than 2008 when it unfolds.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Here in phx az a 95k home in 1997 went up to 260k in 2006, they are now 95k again.
      Wouldnt shock me if they go to 60k.

      We have no idea whats going to happen.
      I look at it this way, bernahanky said housing is dead for at least 5 yrs, so thats at least 10, and anyone that could afford a home would have bought one by now. If you cant buy one at 4% interest you probably couldnt at 0%. Bad credit, no job, no deal. If they need to raise rates why not. people with cash and Srs citiz would love to get 5% and spend some "extra money"

    • If most homeowners have refinanced at the current low rates,
      and rates go up, that will put a lot of friction on the "trade up"
      market. Give up a 5% rate on a 200K home in exchange
      for 7% on 300K? That more than doubles your mortgage.
      Not to mention closing costs and the PitA of moving.

    • What will be the breaking point this time? Housing bubble was easy to see coming, I'm less clear on this one.


      • 1 Reply to the_albums
      • The "breaking point" may be a long way off.
        The rolloff of $2.5T can be invested and reinvested in US paper for years to come.
        And probably will be.
        But when the rates finally do rise precipitously, it's game over.
        The half of America that should be living in tent cities, under bridges, and in the back of their cars right now (but are not because of Obama)...will be.
        Nothing has changed and there is no fat left in the currency to stop it next time.
        Get ready.

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