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Comment by paulpauper | Hacker News Reader

Given that mortgage rates recently rose past 6%, seems to me this latest rate increase is going to put strong pressure on house prices. The rate has a huge impact on the monthly payment required to service a loan, more so than is immediately apparent without doing the math.

People keep hoping or expecting this, yet prices keep going up. As long as wages for top earners keep rising, so will demand in expensive areas. Also, real estate did well in the 90s despite high interest rates, too.

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Prices are not dropping, but sales are drastically slowing down and properties are staying on the market for longer. At least in the Bay Area, a few months ago it was unheard of for a home to stay on the market a month. Now they're sitting there. Definitely think rates are affecting how much buyers are willing to spend.

Slowing sales could be the result of low inventory. That is, sellers are not eager to list/sell. Everyone is waiting and seeing.

Right, it's a terrible time to take on a new mortgage, so there is a strong disincentive for owners to sell at this time.

If you're on a fixed-rate 3% mortgage that loan is looking extremely valuable vs. the best rate you can get right now.

A buddy of mine ended up renting out his condo right next to Dolores Park (ie: pretty great location in SF) after it sat on the market for a few months (including lowering the price). It rented immediately. Places are not selling.

Low inventory is why they were going in a couple days.

Home sales have been falling for several months in all the major US metros though.

We won't see 2008 again but prices will be coming back down to earth from their pandemic rocket ride.

https://www.nar.realtor/blogs/economists-outlook/existing-ho...

I look at rent to gauge the real cost of living somewhere, cause that takes land speculation out of the equation. It seems like house prices in expensive areas have been rising way more quickly than rent.

So yes, I expect this rate hike to cause a big dump in house prices. In a few months or so I'll be right or wrong.

So yes, I expect this rate hike to cause a big dump in house prices. In a few months or so I'll be right or wrong.

But it's also possible that it's priced in. It's been expected for the past 6 months the fed would raise rates a lot.

Could be. There's a recent dip in median Sunnyvale home prices that might be this, but I wasn't following the news enough to tell how closely the Fed decision aligned with expectations.

Prices have corrected across the market, where are you seeing prices going up.

Have they? Certainly have not seen this beyond prices for rural/exurb properties that shot up during covid - even those prices have just come back to what they were before covid.

That's what I meant by the correction - correction to pre COVID levels. The truth is there are many areas where prices have yet to correct to pre-COVID levels of price and growth. If this is driven by inflation then it may take some time (~5 years or so based on what I am reading elsewhere). If it doesn't then maybe this is a systemic increase due to the shift of high earners out of traditional HCOL areas (Bay area, NYC)

They are coming down (maybe not in SV), but I've being watching Riverside county and it's being very noticeable.

> yet prices keep going up

Prices have plateau'd or gone down

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