As usual Michael lays down some uncomfortable truths but omits some facts as well. First the “painfully high interest rates” are normal interest rates but they seem painful after a decade and a half of ZIRP. And the layoffs at google are probably do nothing jobs like marketing and HR. That doesn’t make it less painful for the unemployed but it’s reality.
As usual Michael lays down some uncomfortable truths but omits some facts as well. First the “painfully high interest rates” are normal interest rates but they seem painful after a decade and a half of ZIRP. And the layoffs at google are probably do nothing jobs like marketing and HR. That doesn’t make it less painful for the unemployed but it’s reality.
The interest rates may be at what was once historical norms, I agree, but look at the massively bloated prices of homes. Amortize $750,000 at 1.5% and at 7.5% and note the difference over a 30-year term. The monthly payment is several thousand dollars less at 1.5%. That’s how they turned buyers into suckers. It’s a Ponzi scheme. “They” control all the levers.
I agree that prices need to come down one way or another….rent too. Rents in ordinary cities and towns are now where they were in San Francisco and New York a few years ago and in the first tier higher cost cities rents are in the stratosphere. The reason for lowering interest rates in the first place was to make houses more affordable and to prolong the housing boom for boomers. Look how it has turned out!
As usual Michael lays down some uncomfortable truths but omits some facts as well. First the “painfully high interest rates” are normal interest rates but they seem painful after a decade and a half of ZIRP. And the layoffs at google are probably do nothing jobs like marketing and HR. That doesn’t make it less painful for the unemployed but it’s reality.
The interest rates may be at what was once historical norms, I agree, but look at the massively bloated prices of homes. Amortize $750,000 at 1.5% and at 7.5% and note the difference over a 30-year term. The monthly payment is several thousand dollars less at 1.5%. That’s how they turned buyers into suckers. It’s a Ponzi scheme. “They” control all the levers.
I agree that prices need to come down one way or another….rent too. Rents in ordinary cities and towns are now where they were in San Francisco and New York a few years ago and in the first tier higher cost cities rents are in the stratosphere. The reason for lowering interest rates in the first place was to make houses more affordable and to prolong the housing boom for boomers. Look how it has turned out!