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Comment by wonderwonder | Hacker News Reader

"A higher-rates world would also improve housing affordability, helping young, would-be homeowners. Based on current interest rates, the house-price-to-earnings ratio could fall to around 5.6 – the lowest level seen since 2000. But if ultra-low rates return, there would be further upward pressure on house prices, with our modelling suggesting that they could reach 11 times earnings."

While this is true, I would think the higher interest rates would make it much harder to afford the same mortgage. So while housing prices may go down, the monthly payment will not necessarily go down in lockstep as the cost to borrow increases. Could see it leading to multi property owners not selling but just continuing to rent and increase the rents as many of the people looking to purchase would now not qualify at a higher rate. The landlords are forced to remain landlords as they have a good locked in rate but they cant sell due to reduced equity.

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Yeah, without new stock the house price falls based on the mortgage affordability. So the nominal price is lower but the overall price is the same. Works well if you’re paying cash, I guess.

But of course most people don’t have to sell. They may sit on the property to avoid taking a loss. That makes inventory tight, and means prices won’t fall as much as they otherwise would.

Of course they won't fall. The cost of property is set to extract every extra penny from the working class as possible - either in mortgage rates or rental costs.

The owning class who say "not in my back yard" win regardless, because of the supply problem. And they're the ones both Labour and Tory parties kow-tow to.

Want to solve every problem in the UK? Well that's pretty much impossible after 50 years of mismanagement. But allowing housing and getting rid of other planning obstacles (for say north-south power interconnects) is probably the biggest quickest cheapest thing you could do to improve it. But that would upset land owners.

Build more yes. But you have to prevent "investors" from buying it all up. City of Vancouver built loads of houses but "investors" bought them all up. Vancouver is ranked the third most expensive city in the world for housing.

Also, aren't there plenty of unoccupied homes in Northern England towns? But there's no jobs. So there lies another problem. Supplies of houses where there's no jobs, and vice versa.

It sounds like they didn't build enough.

This is the same situation in the US. Demand for housing has outstripped supply, and until we correct the supply situation, all that changing the financialization does is to make housing a better and better investment for entities flush with cash. Housing shouldn't be an investment in that way, but that's a different conversation. We need to be driving supply.

Agreed. There are many ways for the rich to get richer. Housing shouldn't be one of them.

If we've got money for Ukraine, we've got money for housing.

But then there's ideology and beliefs. There lies the problem.

I think in America prices fell somewhat over the last 8 months but with mortgage rates spiking much as they have, overall things have gotten MORE expensive

Finally the young people with a good sized inheritance/money from parents get a break in life.

Housing prices here are up 5-10% while interest rates are more than 2x a year ago. The low inventory are keeping prices high and that won't change unless an event happens to force selling.

Not in UK but raise in inflation basically make me go from "can afford modest house" into "can afford a shoebox"

And giving banks more money ain't gonna help squat.

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