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Comment by GenerWork | Hacker News Reader

I feel bad for anybody who has to buy or has to sell. The Fed pumping so much money into the system and lowering interest rates really screwed things up, and these rate hikes are also going to screw things up as well.

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Or at least painfully un-screw them.

You can't JUST blame the fed though - the more direct way the government pumps up prices is through mortgage buying via fannie and freddie - yes, at low rates set by the fed.

Don't feel bad for buyers though - they're getting houses at the same monthly payment at a much lower purchase price than otherwise. And if/when rates go back down later, then they can refi to a lower payment as well. And they get to stick it to the next buyer with a higher price.

So yes, I agree with you.

I don't see it. I looked into moving this year, house prices have stayed flat in my area and haven't gone down. rates are double my current, and house prices are huge. a move for me would mean nearly 30% increase in monthly payments for a comparable home in a comparable location. we opted not to move and will try again in a few years

Housing prices may not have gone down - but absent rate increases they would have gone up.

So then buyers aren’t getting houses at the same monthly payment at a much lower purchase price than otherwise.

Yes, in the short term, monthly rates have gone up due to the time it will take for the benchmark rate to push asset prices down. Eventually (at least that's the idea), unaffordable monthly payments should come down to affordable payments as sellers are forced to accept lower prices due to what wages can support. Increased supply would help, which is why if you must buy, new construction is preferable to used homes. New builders must sell what they build to remain in business, existing real estate owners can afford to wait (some longer than others).

It's tricky. If you were an economist you'd insist that if interest rates go up housing prices must go down. If you're anyone else you realize rates goes up, supply of houses for sale goes down because people don't want to move.

Certainly not that way in my area, Phoenix suburbs. Barely anything is being listed anymore and prices are still around where they were a year or 2 ago.

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