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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: GraceZ who wrote (1122)12/6/2001 3:00:49 PM
From: Robert DouglasRead Replies (3) of 306849
 
The longer bond yields remaining high while the short rates are lowered is indicative of the market still seeing inflation on the horizon. While that may mean we won't see lower mortgage rates, it may mean housing will remain firmer than some here want to believe. Real estate is still seen as an inflation hedge.

Yes, the steep yield curve we have is indicative of inflation expectations, but I don't think it follows that this will be good for housing.

The period of the 1970's was one where inflation was high and housing did well, but that was because real interest rates were low, if not actually negative, during the period. With a highly leveraged asset like housing, it made for an ideal situation. That situation is not likely to be repeated.
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