The headline is awful - the longer sentence is in the article: '“We’re just going to have to learn to live with 6.5% or 7% mortgage rates for six to 18 months,” said Liniger.'
The headline is also awful because before 2008 those would be good rates anyway.
If you bet on the 2020-2021 trend continuing you could be in a bad place now, but... that was a weird trend to bet on continuing given the COVID factors that are now largely back to normal. I'm not one to classify the past as some sort of "stable" period that we've now dangerously shifted away from - 1970 was different than 1960 was different than 1980, etc, in so many economic factors - but it's always good to be skeptical of those guaranteeing that the trend will go one way long-term, whether that's "imminent bust" or "imminent boom."
If you weren't able to get in on low rates then, they also likely wouldn't be helping you that much now since prices are only falling slowly. Any downward correction is likely to be a slow painful process since these buyers were generally more financially buttoned-up than the mid-2000s ones were, and will want to ride things out vs sell for huge discounts.
Would higher rates slowly discourage some of the hedge-fund/PE invasion of residential real estate, though?
That means that contracts signed in that period will have that percentage baked into them and that means that for those that ink those contracts that it will take up to 30 years at those rates, unless you can refinance but that will cost you too.
It would have to go down far enough to make the refi worth it, but in expensive markets that doesn't take much. When rates bottomed out during Covid the RE bankers I knew were swamped with refi work, I think even on recent stuff already at 4% to 5%. It was like a perfect storm: low rates -> bidding wars driving up prices -> refi to a lower rate, fees paid themselves back in a hurry, take out some equity to do other home-office-upgrades and similar too.
But yes, you should never assume you're gonna be able to refi. Not that that stops everyone. :(
The headline is also awful because before 2008 those would be good rates anyway.
If you bet on the 2020-2021 trend continuing you could be in a bad place now, but... that was a weird trend to bet on continuing given the COVID factors that are now largely back to normal. I'm not one to classify the past as some sort of "stable" period that we've now dangerously shifted away from - 1970 was different than 1960 was different than 1980, etc, in so many economic factors - but it's always good to be skeptical of those guaranteeing that the trend will go one way long-term, whether that's "imminent bust" or "imminent boom."
If you weren't able to get in on low rates then, they also likely wouldn't be helping you that much now since prices are only falling slowly. Any downward correction is likely to be a slow painful process since these buyers were generally more financially buttoned-up than the mid-2000s ones were, and will want to ride things out vs sell for huge discounts.
Would higher rates slowly discourage some of the hedge-fund/PE invasion of residential real estate, though?