More Money, No Houses

I still get the most questions about what is going to happen to the residential real estate market. As I have stated since March, it’s going to be OK. Here’s another reason why: You can afford 12% More house today because of rates.

Here’s a graph of 30-year mortgage rates. I’ve then graphed how much of a house you could afford relative to a $500,000 house a year ago.

As you can see, instead of a $500,000 house, you could get a $565,000 house today.

You main problem? There is nothing to buy. Many markets have almost no inventory available.

Yes. The last recession housing prices crashed. This is not the last recession. Housing is going to be strong given low rates and no inventory.