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Comment by endisneigh | Hacker News Reader

people who can buy a house all cash will be the real winners here. if and when rates go down, they can cash out refinance, and if they don't they will benefit from the downward pressure high rates create on prices.

it's rich to be rich.

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My wife and I have been waiting for this for a few years now. We live in a college town in the South and the prices here are fairly delusional. I imagine this will allow for some market correction and we’ll be able to get into a bigger home.

I sort of doubt it will correct very much. I assume a fair percentage of the homes are rentals. Landlords won't care to lower prices. They have a client based that's geographically constrained to the college and able to get easy money from the government.

None of the homes we'd be interested in are rentals. Our town presently has ~3k more rental bedrooms than it has college students so a lot of the rental properties are actually going on the market now. But again nothing we'd be interested in buying. But even with the ~3k additional rooms, developers are still building apartment complexes that are "student only". I'm not sure how they plan to fill them.

I'm also from a small southern college town and the housing market has been absolutely absurd for the past decade or so. It's always seemed like football fans looking for vacation homes and retirees were buoying it.

I believe they play a part here as well. My own home has increased in value ~$160k in 3 years. We’re ready to leave this town. The college kids and the retirees make it an absolute chore to live here.

In California property tax is also fixed based off purchase price (thanks Prop 13, love it or hate it) so one could pay ~1% on 1M at 7% vs 1.5M at 3% and then simply refinance the 7% later.

This assumes you'd anticipate rate cuts in the near-ish future. This property tax arbitration could easily go wrong.

I mean, sure, but if rates stay this high for even a year and half - prices are likely to drop substantially.

In that scenario, the real winners will be people who waited to buy.

I guess cash-buyers will do better than financed buyers - but both of them are going to do terribly if prices decline substantially.

You cannot do a cash out refinance if you don't already have a mortgage on the property. You can do a home equity loan or line of credit but those come at higher interest rates than a refinance.

But yes the real winners are almost always those who have ample resources.

did something change? normally even on a home you own outright you can get up-to 80% of the appraised value difference

You're confusing terms.

That's a home equity loan, not a cash-out refinance.

I'm not. You can do something similar with a home equity loan, but you can also do a cash-out refinance. The main distinction is that a refinance, like a mortgage on a home you don't own out-right has a better rate than a home equity loan or HELOC

Anyone buying house all cash even at these high rates are financially illiterate or just dumb.

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