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

To: Mike Johnston who wrote (58844)	4/20/2006 10:09:39 AM
From: tdl4138	Read Replies (2) \| Respond to of 110194

<<< interest rates are part of the equation, the other is money supply growth >>> You may be missing the biggest factor here. It's not the current interest rate that's killing the market. From what I'm seeing/hearing its the actual cost of the property. When a house that's worth $150K is now listed at $300K, the interest rate becomes irrelevant. People are so wrapped up in "the higher interest rate" when they should be focusing on the prices. The valuations are the problem, not rising rates. Mortgages are up roughly 1 point. Is that really a big deal? Only when what you are looking to finance has doubled. The talking heads on CNBC keep referring to a slowing RE market due to higher rates....that's a joke. With relatively no wage growth, the homebuilding industry and speculators have simply priced themselves out of the market.