Hacker News Reader

Comment by SilasX | Hacker News Reader

Aren’t interest rates already at zero?

Are you paying 0% on your mortgage? If not then the Fed has room to lower rates. Joking aside I'd expect the Fed, and former Fed officials, to continue floating this idea into the public discourse over the next 6-18 months. The move into the corporate bond market is a start. QE is not limited treasuries, it is just the most efficent point to start with because all debt is marked off that, or was...

Mortgage interest rates are close to yearly inflation. Soon it’ll be free money to own Realestate, even if it’s not cash flow positive.

We could see a huge run up of property values as people shift to taking advantage of real estate leverage and tax advantages coupled with literally free money.

Literally free money only to those with access to cheap credit, increasing the wealth gap even more.

Some markets are artificially limited. In Texas you can only mortgage, by law, somewhere around $600k. Beyond that you have to get a “jumbo” loan that is at a higher interest rate. Curious to see if that limit gets conveniently repealed.

I don't think there's any law in Texas about mortgage size.

What you may be referring to are the parameters of a "conforming" home mortgage loan.

https://en.wikipedia.org/wiki/Conforming_loan

Conforming loans are subsidized by the US federal government because the US federal government buys them and so funding for them is basically limitless.

You're right, thanks for the link! $424k is the cutoff for a jumbo loan in Texas.

Isn't inflation going to cause an increase in mortgage rates, and effectively push real estate prices down, rather than up?

Inflation means that prices go up.

Mortgage rates for conforming loans are a few points higher than fed rate. That’s cause the government owns the actual loan.

Reply on news.ycombinator.com