I have seen a lot of people saying that homes prices are "out of control" "going to crash" etc etc etc
Here is a case for that NOT happening:
Consider a family of 4, lives somewhere in UT. Husband $70k/year income with a stay at home mom.
In 2018, interest rates were 4.5% for most of the year, cresting to 4.9-5% at the end of the year.
freddiemacMortgage rates took another dip this week as the 30-year fixed-rate mortgage decreased by almost ten basis points, week over week. The economy is improving on the demand side and on the supply side, a variety of goods and materials remain scarce. As a result of this imbalance, pricing pressures are building and causing inflation to rise. Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.
http://www.freddiemac.com/pmms/index.html[http://www.freddiemac.com/pmms/#]
Back then, the average home price in UT was $303k vs $408k today.
In 2018, with a 20% down payment on a $303k house puts the mortgage at $242,400 and the payment (no taxes/insurance) at $1228/mo
In 2021, with a 20% down payment on a $404k house, mortgage of $326,772. Payment is now $1377 with a 3.0% rate.
So bottom line the payment is $150/more a month plus a down payment that requires a little more down. If the family is moving up, they benefit from appreciation on their current home.
But I think the kicker is that wages are going up. To the tune of 3.5%/year. That is $2400+/year in wages, which pays for the increase in home prices. That means that all that has really happened is that lower interest rates have caused home prices to go up--but homes aren't less affordable than they have been.