Yet another
bit of data which supports the assertion that interest rate and prices, home prices specifically, must be correlated inversely in order to 'clear the market'. As offered here many times: capital, on credit, household expenditures are constrained by the nut needed to service the note. IOW, no one really cares what the interest rate and price are; what matters is the monthly nut. If the nut is within bounds, as set by the lender and/or seller, then the 'asset' can be bought. If not, then NOT. When interest goes high, the price must shrink in order to move the stock. Homebuilders will simply stop building if they figure that better times, lower interest, are nigh when they can boost price.
Data from the National Association of Home Builders showed that 22% of builders cut homes prices in April, down from 24% in March. Meanwhile, the share of builders who offered a sales incentive edged lower to 57% in April from 60% in March. Sentiment among homebuilders in America held steady in April, NAHB said.
Again, as mentioned in these essays since time immemorial, what was in my callow youth the 36 month car note has been stretched out to as much as 96. Will we bust triple digits? Only They Shadow knows. For the arithmetically challenged, that's 8 years. Your buggy ends up with a huge total cost, but a monthly nut that fits your income.
You can test the difference.
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