I agree with CR about 90% of the time, but I think he’s off on his post yesterday about House Prices and Interest Rates. His argument is a plan to push home prices up by offering lower rates won’t help much because a rational buyer will realize artificially low rates now will not result in a higher resale value down the road. There might be some buyers who think like that, but I don’t know any. Many people prefer to buy if they can afford it, and interest rates are a key component of that equation. I’ve worked through the math in previous posts here and here.
Thursday, December 4, 2008
Will Lower Interest Rates Help Home Prices?
Posted by Kevin Kleen rpakkleen@gmail.com at 6:40 PM
Labels: Bubbles, Home Values, Interest Rates
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