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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Grandk who wrote (13708)	5/12/2004 1:55:32 PM
From: ild	Read Replies (2) \| Respond to of 110194

Current LT interest rates are not high. They are historically in fact very low. But we need even lower rates in order to buy today's super expensive houses.

To: Grandk who wrote (13708)	5/12/2004 1:57:06 PM
From: Grandk	Read Replies (2) \| Respond to of 110194

I found a few figures on some websites that state 10% as the historic avg. If that is the case, we would still be quite a bit away from panic for the avg investor. I understand that higher i-rates will hurt many who are leveraged up to their necks in debt and mortgages, but how will we keep speculative buyers away? I live in Orange County and it would seem to me that this RE bubble is years away from being pricked. Even with climbing i-rates, there are way more buyers than sellers. Then again, perhaps rising i-rates will begin to weigh on homeowners and force them to sell. Once the ball starts rolling and more and more homeowners try and sell I could see how that will create a buyers market where home prices are bid down instead of up. That will be a strange sight to see...

To: Grandk who wrote (13708)	5/12/2004 7:01:32 PM
From: yard_man	Read Replies (1) \| Respond to of 110194

I think what is important is how much has already been transacted at the currently prevailing rates and how far prices have risen -- absolute rates on an historical basis don't have much to do with it, no?? Of course there were people buying houses when mortgage rates were double digits -- but how fast was the price of a house rising then -- how large a part of ones wage on average was devoted to debt service, etc?? a potential rise in long term rates of 1 - 1.5 % pts here is huge.