In August, I wrote about how many homebuyers are giving up. The combination of high interest rates, low inventory, and exorbitant prices has been a triple punch that has made purchasing a home simply not viable for many people. Others have backed out of the market of our pure frustration. However, the autumn winds blow leaves of change, and even in the span of several short weeks, there are signs of hope that 2024 will be better for buyers than 2023. Let’s dig in.
If interest rates stay high, buyers need their incomes to increase at a fast clip to get them back into the house market. Inflation of incomes reduces the burden of high interest rates. However,
it seems that middle- and low-income earners have been missing out for quite some time and there is no great likelihood that this trend will be reversed. People would have to start working hard like the Chinese. Perhaps high-income earners can be persuaded to forgo their next salary increase and their share bonuses and pay more tax to allow the burden of tax on middle and low incomes earners to be reduced? Perhaps Uncle Joe will simply print some helicopter money and the Fed can be persuaded to accept a 5% inflation rate so that the wall of debt faced by the US treasury looks a bit less forbidding and foreigners can be thereby persuaded to lend more so that the volume of imports can be maintained to keep the big box discounters in business?
If interest rates stay high, buyers need their incomes to increase at a fast clip to get them back into the house market. Inflation of incomes reduces the burden of high interest rates. However,
it seems that middle- and low-income earners have been missing out for quite some time and there is no great likelihood that this trend will be reversed. People would have to start working hard like the Chinese. Perhaps high-income earners can be persuaded to forgo their next salary increase and their share bonuses and pay more tax to allow the burden of tax on middle and low incomes earners to be reduced? Perhaps Uncle Joe will simply print some helicopter money and the Fed can be persuaded to accept a 5% inflation rate so that the wall of debt faced by the US treasury looks a bit less forbidding and foreigners can be thereby persuaded to lend more so that the volume of imports can be maintained to keep the big box discounters in business?