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[–] 13 points 2 years ago* (last edited 2 years ago) (1 child)

The dropping interest rate is one of the main reasons that housing prices have skyrocketed in the past 20 years. People judge housing prices by what they can afford monthly and interest rates directly impact that figure. It's only a matter of time for housing prices to fall drastically if interest rates remain at 7%.

And yes, I have a 500k loan at 2.5% on a 30yr fixed mortgage. Maybe we'll sell our house in 15 years, but otherwise, forget it! I have zero interest in paying it off early.

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  • [–] 7 points 2 years ago (1 child)

    Actual deflation is unlikely. You might see a kind of stagflation where prices drop relative to real inflation, but an actual widespread drop in home prices has literally occurred once in the past hundred years, and that was in 2008.

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