DoubleLine "Lower mortgage rates could actually soften home prices."
The Rate Paradox and Magic Number
GoldFix 3 Bullet Summary
DoubleLine believes it is unwise to bet on housing prices going up as mortgage rates come down next year.
Just as lower rates did not mean higher prices in the crisis of 2008-2011 when 5 million homes were available; Higher rates did not mean lower prices due to the lack of supply post CovidAmong other reasons for current higher prices despite higher mortgages were Low rate “lock-ins” forcing many people to stay put.There is a “magic number” (mortgage rate) that will unlock these homes, and consequently lower mortgage rates may actually serve to counter-intuitively weaken housing prices.
Comment: as one GoldFix founder noted last year if that “magic number” hits hard, you will see even more asymmetric relocations from Northern affluent urban areas to suburban/exurb/Southern locations.