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Articles like this usually start showing up when we’re at the top of a bubble.

There bubble has popped. There are virtually no transactions.

What do you mean by transactions? House sales?

Lots of people sitting on 2-3% fixed rate 30 year mortgages are suddenly deciding maybe staying in their current home isn't a bad idea after all. If you need a mortgage to buy a house, what you can afford just got a lot more modest.

Sales will pick up a little; some people will need to move for reasons they cannot avoid. Some people who don't have fixed rate mortgages will have to sell because they can no longer afford the payment. But right now, sales are pretty low.

Sitting on a home with 2-3% interest is all well and good, until the value drops and you’re sitting on a much worse asset.

I.e. if you own a second home with a 3% interest rate, should you sell now or collect rent on it?

If you have a second home at 3% that means your first home is paid off. You wouldn’t get that rate for an income property.

There are several good reasons for selling it, mostly emergency or retirement reasons. I would keep it and rent it. Inflation is more than double that 3%, “officially”.

What a great problem to have.

Anecdotal data, regarding value drops. I’m in a 30 fixed at 3% in Arkansas. Houses I was looking at in a new subdivision were around $410 when I was looking, this time 2020. They are now in the $700s, and that’s with the current interest rate. So 3 years of mortgage payments, down payments, you’re looking at an outstanding balance on the loan of… around $300k?

The value drop people think needs to happen probably won’t ever happen. Especially since the USD is turning into Monopoly money due to terrible fiscal policy.

Good advice. In our particular case, we bought a new home and are letting family member stay at old one, so have two mortgages.

> Sitting on a home with 2-3% interest is all well and good, until the value drops and you’re sitting on a much worse asset.

What is the mechanism of action that causes the value to drop?

Higher interest rates mean lower house values.

When the bubble popped last time it took three years before the market hit bottom.

Regulation blocking mortgage porting is unfortunate.

Personally I don't give a shit if people can sit on their house forever at -5% real interest rates or whatever. Just let me build a shack out of chicken wire, 2x4s, and tin roof. If you get to rig the game to get a house the least you can do is let me build something with whatever scraps are left in the financial system.

The people that fight hardest against this are the ones that crow loudest about fair and affordable housing, ironically enough.

Letting you do that will bring down the price of houses.

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